The government has shelved plans to introduce defined ambition (DA) schemes and pot follows member to avoid bombarding the pensions industry with too much regulation.
In a written ministerial statement published today, pensions minister Ros Altmann said the market needed “time and space” to adjust to the swathe of regulation including the introduction of the new state pension from 6 April next year, the continuation of auto-enrolment and the freedom and choice reforms implemented in April this year.
Altmann (pictured) said: “All these reforms will increase the number of people saving into workplace pensions, introduce new freedoms allowing savers to access their cash, and implement a new State Pension that will be far easier to understand in the future.
“However, we are conscious of the need to ensure government, providers, employers and members are able to focus on these changes to ensure their success. That is why we have decided that the time is not right to implement defined ambition, collective benefits and automatic transfers. The time is not right to ask the pensions industry to absorb the new swathe of regulation that would be needed to make such further reforms work effectively.
“The market needs time and space to adjust to the other reforms underway and these areas will be revisited once there has been an opportunity for that to happen.”
DA was first proposed by former pensions minster Steve Webb as part of the Department for Work and Pensions’ Reinvigorating Workplace Pensions strategy. It was touted as a half-way house between defined benefit and defined contribution where the employer and employee share an equal amount of risk, although the finer details had not been clarified.
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