Lord Richardson, former Governor of the Bank of England, outlines the origins of present pension arrangements and goes on to discuss various interrelated and overlapping questions concerning pension provision.
- Pension schemes entail undertakings which will call for implementation over a future which stretches many decades ahead. The extent to which these claims on resources will contend with other claims will depend in large part on the development of the economy over the future - which cannot be foreseen at all precisely. Questions thus arise as to what is sometimes popularly referred to as the future 'burden' of pensions.
- Pension undertakings under occupational pension schemes are made in connection with employment by particular firms - which usually make membership a condition of employment. Existing practice may disadvantage certain classes of members, as for example people who move from one employer to another.
- Questions may arise as to how far these inequalities can or should be remedied- bearing in mind the interests not only of all employees but also of employers.
Questions arise about the tax treatment of contributions to pension funds, which encourage saving in this form.
- There is a lack of precision as to the legally-enforceable rights of members of pension funds. This question, when thought through, may be seen to have wide implications.
Finally, Lord Richardson comments on the role of the pension funds in the capital market.