Two publications this week from the DWP lie at either end of the spectrum of pensions legislation. In a press release accompanying the Government's Response to the May 2006 White Paper Security in retirement: towards a new pensions system consultation, the Minister (James Purnell) said

"We are now looking at radical simplification of the additional state pension so that people would receive a weekly flat-rate top-up for every year spent working or caring. That top-up might be, for example, an amount worth around £1.40 for every qualifying year."

The Chapter on State Pensions in the White Paper attracted by far the greatest number of comments from individuals; organisations were slightly more concerned about Personal Accounts. The Government Response generally leans towards the positive, unsurprisingly. Undoubtedly, too, many organisations recognised that Personal Accounts in particular were going to happen anyway, so it made sense to clamber on board.

While claiming to have achieved a high level of support and consensus for its proposals, the Government has been forced to recognise that reforming the state pension system is a sine qua non for wider reform. Three issues stood out as especially controversial:

• whether the objectives of the state pension system would be better served by moving to a single-tier flat-rate State Pension at the level of the Pension Credit standard minimum guarantee, often referred to as a Citizens' Pension (the Government says 'no');
• the extent to which the new state pension system will make it 'pay to save' for people in personal accounts, or whether future interactions with income-related benefits would result in an opt-out rate higher than in the Government’s central estimates (at least the Government has finally accepted that "the purely voluntarist approach to pension saving has not worked"); and
• whether the schedule outlined for future increases in the State Pension age was sustainable in the face of the uneven distribution of increases in life expectancy across different income groups ("we will support and encourage extended working lives", says the Response).

In another White Paper due in December (we hope it means December 2006), the Government promises some refinement of the stark choice between two alternative models originally favoured for Personal Accounts. The Response also reiterates, inter alia, the intention to allow schemes to convert GMP rights into scheme benefits, first announced back in October 2003.