Magazine article Management Services

Pension Security Can't Be Solved by Tighter Regulation

Magazine article Management Services

Pension Security Can't Be Solved by Tighter Regulation

Article excerpt

The lack of pension security in the UK is a scandal, according to ESRC research at the University of Warwick. "New Labour has continued to push a private solution to what is essentially a public problem," says Professor Noel Whiteside, who conducted the research. "The consequent regulatory morass has raised administrative costs, provoked confusion and destroyed the market signals that such a system was supposed to offer," she explains. "Moreover, the archives show that this solution has been promoted assiduously since the late 1950s. This is an old policy. It did not succeed in the past and cannot do so now."

The research, which is part of the ESRC Future Governance Programme, draws on the experience of French and British policymakers in the 1950s and 1960s to analyse the ways in which both countries adapted occupational pensions in response to the problems of pensioner poverty. France and Britain both opted for a similar strategy, but the way in which these have been developed reflects very different institutional structures and policy priorities, Noel Whiteside says.

"In France, pension security was viewed as an essential component for labour mobility and industrial modernisation, whereas in the UK pension funds were largely as sources of inward investment and as a means to limit state liability," she explains. The research findings demonstrate how differences in labour law allowed the French to negotiate a national umbrella organisation charged with guaranteeing occupational pensions (ARRCO). While in the UK such schemes remained vulnerable to employer bankruptcy, erosion of value and offered little or no protection for women (who make up the vast majority of the pensioner population.)

The bad press surrounding British commentary on the current French pensions' crisis springs from the cost of pensions in the French public sector, which is quite a different issue. …

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