Article date: 30 November 2005
Gary Withers, chief executive Norwich Union Life, said: "Thereport contains some good concepts, particularly the idea ofincreasing flexibility of annuities*, and the simplification of thestate second pension by phasing the removal of contractingout.
"But clarification is needed around the assumption that theNational Pension Saving Scheme (NPSS) will be an unregulatedproduct; not least because of the potential impact this has onequivalent private pensions products.
"With this in mind, we also question whether the proposed 0.3%annual management charge (AMC) figure is realistic if placed underthe same regulatory burden the financial services industrycurrently faces.
"We also have significant concerns regarding the efficiency andquality of the planned Government-run National Pensions PaymentSystem, where experience has shown that major problems can occur.There is a track record of the private sector being a moreeffective operator of such systems."
*The proposals suggest that a cash limit should beapplied on the amount which individuals are required to purchase anannuity at any age. This issue would need to be investigatedproperly before implementation to avoid potential negative affectson individuals.
Cheryl Cox 01904 452617 07800 695275
Rob Pell 01904 452659 07800 699 563
James Evans 01904 452791 07800 699525
Notes to editors:
Norwich Union is one of the UK'sbiggest insurers. It is a leading provider of life, pensions andinvestment products and one of the largest Financial Adviser (FA)providers. FAs provide over 70% of the company's long-term savingsbusiness in the UK.
Norwich Union has strategic alliances with building societies andother leading UK brand names including CIS and The Royal Bank ofScotland Group. Norwich Union’s news releases and a selectionof images are available from Aviva's internet press centre atwww.aviva.com/media.