UK insurer Norwich Union has given its support for the creation of a national pension savings scheme as outlined in the Pensions Commission report.
The UK’s largest insurer proposes that a scheme should be based on a single account that follows the individual between employers with a simple regulatory environment and management charges of around 0.6% a year, very much in line with government thinking. The minimum contribution should be 8% of earnings, contributed by the individual, the government and employers.
Norwich Union, part of the Aviva group, said it will submit its proposals to the government which has launched a consultation on the creation of a national pension savings scheme (NPSS).
The pensions commission recommended that total default contributions into such a scheme would be around 8% of earnings, made up of 4% contribution from the employee, 1% from the government in the form of tax relief and 3% from matching compulsory employer contribution. The commission believes that the scheme should aim to deliver an Annual Management Charge of 0.3%.
Alternative proposals have been put forward by the Association of British Insurers, the National Association of Pension Funds, the Investment Management Association and the Pensions Reform Group, although the NPSS has had support from consumer group Which? and trade unions.