Final salary pensions could be endangered despite ministers' plans for a safety net to compensate those who lose their life savings when their employers collapse, experts have warned.

Forum Response: Counsel and Care

Martin Green, chief executive of Counsel and Care, told ePolitix.com: "There are major problems in the private pensions market. Firstly there is the need for a safety net when pension funds crash and to a limited extent this is being addressed by the pension protection fund. The far more difficult problem is not what happens when pension funds crash, but what happens when they do not perform. This will leave millions of people who have saved for their retirement with low incomes and no access to the capital funds they have accumulated. Tackling the issue of guaranteeing income levels is where the government needs to put its energy."

Forum Response: Institute of Directors

Derek Brownlee, pensions executive at the Institute of Directors, said: "The concerns raised are serious, and entirely predictable. The pension protection fund is fine in principle, but as always the devil is in the detail. If, for example, the PPF has to operate on a very cautious basis then the cost of the levy to employers will be higher, which will speed up the move away from final salary pension schemes. That could be avoided by allowing employers to pass on the cost of the levy to employees. We hope that a workable scheme can emerge, but we will wait and see."