DWP proposes removing indexation in final salary schemes

After a year of consultation with the industry, the DWP has proposed ‘flexible defined benefit' (DB), guaranteed defined contribution (DC), and collective DC options. Flexible DB The DWP said the end of contracting out brought on by the introduction of the single tier state pension provided an opportunity to simplify DB administration. In its flexible DB model, the DWP proposes to remove, for future accruals only, the statutory requirements for the indexation of pensions in payment. "Indexation would no longer be compulsory, enabling employers to provide a slimmed-down, reformed ...