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Plugging the gap By Robin Blackburn The Pension Commission has argued that, if present trends continue, there will be a shortfall in pension provision equivalent to 4 per cent of GDP by 2050. The government has signalled that it is no longer committed to the strategy it elaborated in 1998 and it has called for a debate on the measures necessary to ensure the long-run adequacy of retirement provision. The TUC has argued that the key to solving the pension crisis is to restore the employers’ contribution to pension funding. This paper outlines a radical proposal for achieving this end – the institution of an asset levy under which new shares, calculated at 10 per cent of profits annually, would be issued to Pension Reserve Funds to set up a claim on future dividends and supply a new layer of provision to all. It is calculated that the total Reserve Funds would be worth £1 trillion by 2031 and that it would generate an income of £40 billion annually, enough to plug more than half of the deficit identified by the Pension Commission. Robin Blackburn is Professor of Sociology at the University of Essex and author of Banking on Death or Investing in Life: the History and Future of Pensions (Verso 2002). See other Catalyst publications on this topic: Labour’s Pension Challenge: Building a progressive settlement Better Pensions: The state’s responsibility The Challenge of Longer Life: Economic burden or social opportunity? From Security to Risk: Pension privatisation and gender inequality |
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