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New Plans For Workplace Pensions

New Plans For Workplace Pensions

A variety of reforms to workplace pensions have been outlined by the Government. Ministers say the proposals will ensure greater certainty for future generations as well as a more equal sharing of investment risks. Firms implementing workplace pensions are advised to speak to employment law solicitors.

Striving For Better Workplace Pensions

It is also hoped the changes, promised in the coalition agreement, will assist employers to provide better workplace pensions. Recent years have seen a sharp decline in defined benefit (DB) pension schemes, with the percentage of open schemes cut by more than half since 2007, from 36% to 14%. Only 841 schemes are still open. The Department for Work and Pensions has for the past year been working closely with businesses and the pension industry to find ways of offering new defined ambition pensions. These schemes see staff and their employers share the risk and will be guided by a new legal framework which lets businesses keep offering salary-linked pensions instead of shutting DB packages. Defined contribution pensions that provide a more stable income on retirement will be possible.

“Final salary pensions have been in long-term decline and if we do not act it could disappear altogether,” said Minister for Pensions, Steve Webb, adding: “We want to help the best employers offer good alternatives including new forms of salary-linked pensions.” Mr Webb said the best pension arrangements across the world had been looked at, with a view to offering British workers similar schemes. “Our proposals for defined ambition pensions are designed to reinvigorate workplace pensions, providing people with more certainty about what they will get in retirement,” he said.

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