The United Kingdom announced yesterday that personal accounts will become part of its state pension program beginning in 2012.  Workers not covered by employer pension plans will be enrolled in personal accounts with the ability to opt out, though the government expects few people to do so.  Officials predict 6 million to 10 million citizens will participate in the program.

The reform proposal is based on the work of the UK Pensions Commission, which was established in order to "meet the needs of generations to come."  Specifically, the commission was charged with addressing the problems of fewer workers per retiree and a low private savings rate.  If these problems sound eerily familiar, note that BBC News reports, "The United States faces some of the same demographic pressures as the UK...The social security system [in the US] is projected to become insolvent by about 2040."  Lesson: We should pay attention to our "more intelligent and civilized" friends in the UK.  

In coming up with the proposal, officials decided upon five criteria for pension reforms. Here are the criteria, quoted from the Pensions White Paper: 

1) Promote personal responsibility.

2) Be fair.

3) Provide greater simplicity.

4) Be affordable.

5) Offer a sustainable solution.

The Pensions White Paper goes on to explain in detail how it is that personal accounts meet all five criteria.  If you think this too sounds familiar, well, we know how you feel.

Now that their work is done in the UK, do the folks from the Pensions Commission want to help us meet the needs of our future generations?

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