The Pensions Management Institute (PMI) and Imperial College London announced today a memorandum of understanding for them to work together on exploring the longer term options for retirement provision in the UK.
This announcement comes at a time of significant change and
development for UK pensions which fund the bulk of retirement
savings in this country.
This year will see the arrival of auto-enrolment: the process which will automatically make virtually every adult worker in the UK a member of a pension scheme and is expected to bring in a million employers and up to nine million employees who hitherto had not been part of the retirement savings process.
The research will look at some of the major issues affecting retirement savings in the UK. Increased longevity which will mean that by 2035 life expectancy from birth is expected to reach 83.4 years (males) and 87.0 years (females) an increase of nearly five years each since 2010, according to ONS figures.
At the same time there are the increased pensions deficits of the UK's private sector final salary schemes (now standing at £255 billion). The trend of closing private-sector final salary pension schemes is ongoing with companies switching to generally cheaper money purchase alternatives. This issue finally culminated in the final FTSE 100 company (Shell) with an open defined benefit scheme closing it to new joiners last month.
Vince Linnane, PMI chief executive commented: "The PMI has been considering bringing an academic partner on board for some time. Whilst we have experience gained over four decades amongst our members of advising and managing pension schemes, we felt that such seismic changes for our industry should lead us to examine how we can benefit from aligning ourselves with an institution which can offer academic enhancement, collaborative research and innovative thinking to promote even higher standards of excellence in retirement provision."
He added: "The future of providing an adequate standard of living in retirement is one that will challenge this country for decades to come. We hope that our partnership with Imperial will, over time, stimulate some fresh thinking on finding solutions to this problem."
Dr Zen Makuch, head of environmental science at Imperial, said:
"Imperial College London already has excellent links to the
business community which this collaboration will further
strengthen. The UK has as much invested in pension funds as the
value of its GDP. The strength and vitality of UK pension schemes
feed directly into the general well-being of UK plc.
"We see the partnership with the PMI as being a primary driver towards Imperial strengthening connections with business communities in the UK and I am confident that the innovative thinking that has led Imperial College London to be rated one of the highest rated universities in Europe will be of enormous benefit to the UK pensions industry and the PMI."
Both sides will now form a working party to report back on shaping the technical content, timeline and proposed goals of the partnership with a further announcement due at the official signing of the partnership.
The PMI is the professional body which supports and develops the experts who run UK pension schemes. For more details you can visit www.pensions-pmi.org.uk
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