One of the key strands of DWP’s Reinvigorating Workplace Pensions strategy document was exploring whether current private pension structures would meet the needs of future generations of pension savers and the scope for a new category of ‘Defined Ambition’ pensions that facilitate greater risk-sharing than the current, polarised DB and DC structures.
We were supportive of the Defined Ambition agenda because we have long argued for greater risk-sharing and reduced regulation in pension provision in the UK. We need to create a framework that will enable the development of a genuine mixed economy of pension provision so that employers are free to provide the form of pension provision that is right for them and their employees, whether core DB, DC plus or options at some other point on the risk-sharing ‘spectrum’.
The Pension Schemes Act 2015 legislated for this new risk-sharing framework. However we are still awaiting the associated regulations which have been overtaken by the implementation of the pension freedoms.