Measures that could make it easier to introduce shared risk pension schemes will be considered by the government and industry in the New Year, Lord McKenzie reveals.
The parliamentary under secretary said he would work with the industry to investigate what more could be done to share information on current risk sharing practices and look into flexibility in the way pensions accrue for future service to reflect increasing longevity.
He also said burdens imposed by the arrangements for contracting out would be looked into and the government would also consider whether the requirement to index pensions in payment is appropriate for cash balance schemes.
The announcement follows a department for work and pensions consultation on the issue.
The government also said it would look further at how collective defined contribution schemes might work in practice, however, it has decided not to pursue conditional indexation.
The DWP said "the consultation did not provide sufficient evidence that it would have a significant impact on continuing defined benefits provision".
McKenzie said: "We want to strike that balance between easing the burden on employers who run occupational pension schemes and ensuring that the members of those schemes have the protection they would expect.
"The work we will take forward next year will give all of those involved the chance to explore how we can bring forward changes that make it easier to share pension risks."
He added: "There was also significant support in principle, for the development of some form of collective DC arrangement and we will carry out further work on the detail of how collective DC schemes might work in the UK. However, we do not feel that the responses to the consultation provided a workable consensus on conditional indexation at this time."
The consultation closed on August 28 and it received more than 80 responses.Professional Pensions
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