Debi O’Donovan, editor of Employee Benefits: Time is running out for rethink on retirement and pensions

All of us in benefits know that current retirement and pensions practice cannot continue. No politician wants to tell the people that to make the state pension work, most of them cannot live until the official retirement age, or the sums simply do not add up.

So the nation is being fooled into a complacent acceptance that it is all right to have a state retirement age that is below that of average life expectancy, and that employers can force people to retire at 65.

Will someone please stand up and raise the age at which people receive a state pension (and not by just two or three years in several decades’ time – we need faster action than that) and work toward scrapping the ability of employers to forcibly retire people at 65.

Over the next 20 years, the working population will shrink while the number of pensioners will steadily rise – leading to lower productivity and a greater drain on resources. Clearly, this is not a sustainable situation.

Meanwhile, in the private sector, quality, paternalistic pensions provision continues to be undermined by pressure from employers to cut costs, and from providers and advisers doing the hard sell on contract-based schemes. Although the latter are fine in themselves, it is a concern how hard some advisers push them onto employers as a solution to all their risk and cost problems.

Contract-based schemes are not the panacea many make them out to be, and need a strong duty of care and financial input from employers to get anywhere near providing a liveable pension for staff in retirement. Many reward and HR people want to strive to deliver this, but often face apathy and ignorance from staff.

Changes to the way the pensions of high earners are taxed will mean company bosses are less likely to have a vested interest in supporting good-quality pensions and their focus will switch to other forms of tax-efficient reward.

The recession is exacerbating the ever-growing pensions crisis, but the downgrading of pensions means we will be paying the price for decades to come.

Attitudes to both what is acceptable as a decent pensions contribution level (and the 8% coming in from 2012 is not nearly enough) and a realistic retirement age need to be totally rethought now.