UK review calls for company pensions overhaul

A British government-sponsored review called today for a radical overhaul of rules governing company pensions in an attempt to…

A British government-sponsored review called today for a radical overhaul of rules governing company pensions in an attempt to make them more financially secure for both pensioners and their companies.

It recommended company pension payments should no longer be automatically adjusted for inflation nor should schemes be required to supply benefits to surviving spouses. Employers should also be given the right to require all new employees to join their pension plans.

It said that it should be made easier for employers to reshape pension arrangements depending on economic and other circumstances.

The review said the measures were designed to make it easier for employers to provide "good quality" pensions for employees and easier for individuals to accumulate pension benefits.

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The reports come as many countries in Europe face a so-called pension time bomb, with an ageing population and low birth rate threatening to stretch the ability to care for retired workers.

If reforms encourage Europeans to save for their own retirements, however, a huge pot of money will be built up that would energise financial markets, providing economies with cheaper working capital and sparking a boom in asset management.