The Association of Consulting Actuaries (ACA) has expressed its strong support for the pension minister’s initiative to back a range of "defined ambition" workplace pension schemes.
Stuart Southall, ACA chairman, commented: "We are encouraged that at last the government has seen the need to take action to encourage more employers to provide workplace pensions that offer employees a more certain pension than many now can expect. What the minister has termed ‘defined ambition’ schemes also offer employers the ability to control the cost of their pension package in a way they cannot at present with most defined benefit pensions.
"Our 2011 ACA Pension Trends survey – echoing results in previous surveys – found at least half of the employers surveyed said they should share or take the majority of the investment, longevity and inflation risks in providing workplace pensions.
"The likely end to defined benefit contracting out in a few years’ time (for example, as part of future state pension reforms) gives the resources for the government to incentivise employers who offer their employees superior workplace schemes. But, having already vastly over-complicated pensions taxation, it will be more important than ever that the Treasury does not simply pocket the value of present national insurance contribution rebates to fund short term spending ‘priorities’ as it arguably has in the case of the Royal Mail pension scheme."
Author: Pensions WorldPensions World is the leading monthly magazine for pensions professionals published by LexisNexis.