Reforms of the British Pension System : Reestablsihment of the Public-private Partnership

영국의 연금개혁 : 공.사 협력관계의 재구축

This paper analyses the proposals contained in the British Government Green Paper, A New Contract for Welfare: Partnership in Pensions for low paid workers and the potential of the new rules to guarantee a decent income in old age. The UK pension system is a partnership between the State(providing the basic state pension and the SERPS), employers(providing occupational pension scheme) and private pension providers(providing personal pensions). Although the system needs to change, this partnership remains the right foundation. However, the pension Green Paper proposes substantial changes to second tier pension provision in the UK. In particular, the Government plans to replace the SERPS with a new State Second Pension. According to the Green Paper, this will result in "dramatically better pension provision for those earning less than ${\pounds}9,000$ a year" and through increased payments to private pension schemes, will also provide "extra help to those on middle incomes(${\pounds}9,000-{\pounds}18,500$ a year). Therefore, it discusses the general principles inherent in the design of the British pension system and analyses the balance of these principles is represented in the Green Paper. The paper then examines how the Government's proposals protect individuals from a means-tested old age. This paper finds that the Green paper's proposals add up to reinventing a new two-stage basic pension. However, two key features of a such a basic pension package are missing- an 'adequate' level of payment and comprehensive entitlement. Because of these missing principles we argue that the Green Paper's proposals incorporate for the low paid. The income from the basic pension and the secondary pension which is so near the means-tested minimum that little is gained in retirement from a lifetime of work and contribution. Indeed, the shift away from collective provision and the emphasis on individual responsibility will reinforce this inequality, so that many poor will continue to experience poverty in later life.