Parliamentary Bill for 'collective' pension schemes today

Dutch style collective pension schemes are part of a Bill going before Parliament today. Despite various industry figures casting doubts over the merits of the Collective Defined Contribution proposals, Pensions Minister Steve Webb is to press ahead with the overhaul of the private pensions market.Legislation will be brought forward today to enable "new, internationally-renowned models of pension scheme" to be brought to the UK market.The Department for Work and Pensions released results of its consultation on 'defined ambition' and collective DC schemes today.Its report stated: "We believe there is a broad consensus of support for the 'defined ambition' package."It said new research showed more than a quarter of employers – 28% – may be interested in greater risk sharing with their employees.{desktop}{/desktop}{mobile}{/mobile}The DwP report stated: "The proposals to develop a DA space will help encourage a flourishing private pensions' market that has the flexibility to respond to consumer needs and provide sustainable pensions for millions of savers in the future."Our focus is on the changes that are likely to make a real difference in reshaping workplace pensions for future generations– to enable the market to evolve in a way that includes possibilities for offering more certainty and stability of outcomes than traditional DC schemes, and a legislative framework that clearly reflects a risk-sharing space."Pensions Minister Steve Webb said: "These new proposals are all about encouraging a flourishing and diverse private pensions market by providing greater choice to employers and savers."These reforms meet the needs and concerns of business while, at the same time, standing up for the interests of workers who are doing the right thing and saving for their retirement."With the backing of consumers and industry, this Bill will bring about new and realistic pension scheme options for those employers who want to do right by their staff."The purpose of the new legislation will be to enable employers to develop shared risk – or Defined Ambition – schemes which offer more certain outcomes for their workers, while still keeping costs under control."Tom McPhail, head of pensions research at Hargreaves Lansdown, was critical of the changes.He said: "This is a moderately good idea being delivered at a particularly badly timed moment."The timing couldn't be worse. Large employers have already gone through auto-enrolment; they don't want to go back now and redo the whole exercise as a Defined Ambition scheme."In addition, the Chancellor's new pension freedoms announced in the budget are pulling pensions in precisely the opposite direction."Without a large employer, industry trade body or union to embrace Defined Ambition and to provide the numbers of "members and momentum they require, it is hard to see how they're going to get off the ground for the foreseeable future."We have yet to come across a single employer who has confirmed that they definitely intend to introduce one of these new schemes for their employees."He said because of these issues even the most enthusiastic proponents do not anticipate anything more than "at best a very slow and gradual take up" of the pension scheme.The Government has also confirmed it will not pursue measures to allow reform of existing Defined Benefit schemes, after the consultation showed concern about the potential impact on current savers and pensioners, as well as a lack of interest from employers in such an option.

Parliamentary Bill for 'collective' pension schemes today

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