THE new chief executive of Britain’s most powerful pensions body will tell the Government today that the country’s best retirement funds should be awarded a Kitemark for quality to safeguard benefits.

On her first day as head of the National Association of Pension Funds (NAPF), which represents £800 billion of pension funds, Joanne Segars will make a series of recommendations including incentives for companies to keep their workplace schemes open.

Ms Segars will make the proposals amid concern that employers could water down contributions to workers’ funds when the Government’s new personal pensions savings accounts — first proposed by Lord Turner of Ecchinswell as the National Pensions Savings Scheme — are introduced.

“Personal accounts offer an opportunity but also a threat,” Ms Segars told The Times. “We plan to lobby the Government very hard to defend the good pension provisions that our members already make.”

Under government plans, employers would have to contribute 3 per cent of workers’ wages to the accounts, which are designed to encourage non- savers to put aside money for retirement. The accounts are due to come into effect in 2012.

But 3 per cent is far less than most companies contribute to pension schemes, raising fears that they will “level down” their contributions to the recommended mimimum.

“What will concern us is if we see good pension provisions going down to personal account levels,” Ms Segars said. “We don’t want personal accounts to become some giant thing that overrides good-quality workplace pensions.”

Calculations by the NAPF show that if companies “level down” contributions to 3 per cent, workers in an average scheme would be £5,000 a year worse off in retirement.

The NAPF has set up a working party to develop a Kitemark for pension funds that could be used by a company on job adverts and brochures to indicate that it offered a better pension than the new personal accounts. The quality badge would be awarded by an independent body such as the Pensions Regulator or by one specially established.

Ms Segars said: “We’d been looking mainly at the level of company contributions, but also at the additional things available, such as life assurance and spousal benefits, and the quality of communications with members.”

The Kitemark would not take into account a company’s financial stability because that is already monitored by other bodies, she said.

The NAPF wants workers and companies to be prevented from moving existing pensions savings into personal accounts.

Other recommendations include incentives for companies to keep their workplace schemes open, the establishment of a waiting period of up to a year before workers and companies have to pay into the accounts, and transitional measures for company contributions to personal accounts.

Joanne Segars has a uniquely well-rounded view of pensions, having seen them from the point of view of the unions, the insurers and now the companies that provide them.

Ms Segars was senior pensions officer at the TUC, before becoming head of pensions savings at the Association of British Insurers. She joined that National Association of Pension Funds (NAPF) as director of policy in April last year and was named chief executive in July. Ten million British workers are members of NAPF schemes and five million people draw an income from such a scheme. NAPF’s members have assets of about £800 billion, representing more than 20 per cent of all investment in the UK stock market. Ms Segars said that the association was in good financial shape but admitted that the new job would be a challenge because of the ever-changing pensions environment.

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