Novelist. Author of APSARAS and tales from the beautiful Saigh Valley. First person to quantify spiritual values.

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Wednesday 27 October 2010

Pension funds

The Government have announced new compulsory legislation requiring all companies to set up Pension Funds. It applies to all employees that have been with the company for a minimum of three months. It will require that the company puts in a minimum of 3% of the salary into the fund. This at a time of recession when inflation is still increasing. This is another tax on employment and as such, smacks of a Liberal Democrat measure that forms part of the  conditions of coalition.

However, in some ways I think it makes sense. People, particularly the young, are reluctant to put money into something they won't need for decades and it makes sense to make it compulsary. My big problem is that this money will probably finish up with the traditional financial services firms that traditionally drain the funds of HUGE percentages of their clients money and charge commission when the fund doesn't perform and leave people wondering if years of thrift and saving was all worth it.
The public need a fund that isn't motivated by excessive greed, invests in guaranteed assets that are not at the whim of speculators and is answerable to an independant organisation. Parliamentarians are human after all and have friends in the massive financial services industry. We must see that that the new rules are not feathering the nests of their friends. The government must put a sensible lid on commissions and expenses for these pension funds.

I, for one, will be watching.

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