By Daniel Hunter
The Government is today (Thursday) publishing its first proposals to rebuild confidence and trust in workplace pensions, and reverse nearly half a century of declining membership.
A paper called, Reinvigorating Workplace Pensions, contains new ideas for sharing the risks more equally between employer and employee, and for helping people get the most out of what they save in a pension.
The paper draws on extensive discussions with pension providers, actuaries, investment firms and lawyers, including with an industry working group led by Andrew Vaughan, Chair of the Association of Consulting Actuaries. It contains an emerging strategy on how to deliver real and significant change.
This follows a challenge to the industry earlier this year by the Pensions Minister to develop more attractive and affordable ways to save.
"Automatic enrolment is a huge step forward, but it’s only the start; we must ensure people are saving in high-quality, value-for-money pension schemes," Steve Webb, Minister for Pensions, said.
"For nearly half a century, we have seen declining numbers of people in workplace schemes - I am determined to reverse this trend and ensure we have pensions that are affordable to employers and attractive to employees.
"To rebuild confidence and restore trust in our pensions system, we need better value-for-money, good governance and greater transparency. The ideas we are publishing show the progress we are making on these issues.
"Now is the time to reinvigorate workplace pensions, if we simply stand by as too many previous Governments have, another generation could miss the chance to put something by for their old age."
The Department for Work and Pensions’ paper includes a range of ideas for restoring confidence in pensions, including; the creation of new Defined Ambition pensions, achieving greater scale in pension funds, more transparency on charges, and other ways to help people recognise a good pension scheme.
Andrew Vaughan, Chairman of the Association of Consulting Actuaries and Chair of the DWP’s Industry Working Group said: "The paper demonstrates how industry has worked creatively with Government to develop ideas on Defined Ambition. This is a very good start and we look forward to continuing to work closely with DWP as Defined Ambition develops."
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