The UK pension minister Steve Webb is proposing the introduction of ‘Defined Ambition’ pensions in an effort to bridge the gap between defined benefit and defined contribution offerings and spread the risk between employer and employee.

Chances are, these proposals will meet resistance from employers keen to offload their pension liabilities.

The defined benefit (DB) versus defined contribution (DC) debate is nothing new – employers with over-inflated pension promises have been doing their utmost for some time to place the risk squarely onto employee’s shoulders by closing off DC schemes or transferring existing DB members into a DC scheme.

The take-up of DC pension schemes has been disappointing and the scale envisaged has not yet been achieved.

Drivers for the lack of penetration include people opting out of workplace pension schemes (particularly in this low growth environment when cash flow is low) or them not putting enough money into the scheme.

Auto-enrolment rules which came into force in October this year are a step toward remedying this situation and having more people contributing to a pension.

However, the issue of small pots of money will persist; in view of the 8% minimum contribution, most individuals will choose.

Furthermore, seeing as these will be DC schemes, the risk sits solely with the employee which begs the question: “Is this fair?”

Steve Webb’s proposals for defined ambition (DA) pensions constitute an effort to make the situation more equal rather than see-sawing between the employer and employee when it comes to risk.

Webb says: “With a DA pension, risks are shared, offering greater certainty to savers about the final value of their pension pot than in DC, and less cost volatility for employers than in DB.

While examples of these types of pensions already exist, such as career average or cash balance schemes, the Government wants to see how it can encourage and incentivise the industry to develop other more innovative products and bring more of them to market.”

He says new models for DA pensions could include conversion of benefits, where the employer promises a defined level of benefit which is converted to a cash lump sum when the member leaves the scheme. Money-back guarantees could also be considered, which would see savers getting back at least what they put into their pension pot. unshaven girl займ без процентов на годзайм на 30000деньги в займ петрозаводск