A 'middle way' for workplace pensions

Friday, July 3 2009

The Association of Consulting Actuaries (ACA) is calling for a "middle way" to be made available for workplace pension schemes in order to revitalise uptake among the nation's employees.

Chair Keith Barton explains that some current schemes have entered demise due to the "burdensome guarantees" placed upon them.

However, he claims that a "middle way" which lies between defined contribution and defined benefit schemes could help to revitalise workplace pensions.

"Middle way schemes would provide greater certainty of benefits for members compared with defined contribution and greater certainty of costs for employers than current defined benefit schemes," Mr Barton says.

The ACA argues that good-quality private pensions should remain a priority during the ongoing introduction of Personal Accounts.

Mr Barton previously spoke of the need to eliminate volatility from pension schemes in order that individuals might be able to make a reasonable estimate of the income they might expect to receive during retirement.