Pensions crisis 'not bosses' fault '

DIGBY Jones, director-general of the CBI, has denied that employers are to blame for the looming pensions crisis. Instead, he criticised tax measures imposed by Chancellor Gordon Brown and his Conservative predecessors - and repeated calls first made this summer for the Government to raise the State pension age to 70.

Jones said that phasing in five extra years of work by 2030 was 'not a lot to ask' of people.

Many companies have been heavily criticised for closing traditional final salary schemes and for taking long pension contribution holidays during the 1990s and even later.

But Jones said that employers had been turned into a 'whipping boy' over pension woes.

He claimed companies could not afford to write blank cheques to their pension funds at a time when they faced higher raw materials costs, increased red tape and strong competition from overseas.

He said their profits would be hit, leading to job losses. 'We can't have profitless prosperity,' he said at a CBI conference.

Adair Turner, chairman of the Pensions Commission and Jones's predecessor at the CBI, said employers must play their part in solving the retirement crisis.

He said that by moving out of traditional final salary plans into schemes linked to the stock market, they were transferring all risk from themselves to their staff.

He called on companies to come up with a 'creative redesign' to spread the risk.