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Steve Webb: DB will be ‘dead’ without defined ambition

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Pensions minister Steve Webb has warned defined benefit schemes will be “dead” unless the Government drives through reforms to reduce the risk borne by employers.

The Government is currently assessing how it can ease the financial and regulatory burden placed on firms who want to offer DB pensions as part of its “defined ambition” reform agenda.

Speaking at the launch of the annual Scottish Widows UK pensions report in London this week, Webb said: “We want to come up with a DB structure that does not cost significantly more than a relatively generous DC scheme. So you could strip out inflation risk and potentially strip out longevity risk and then look at the costs of providing that.

“The reality is if I stand idly by and do nothing, DB will be dead. I think at some point the DC pendulum will swing back towards DB and when that happens, we need to have the architecture in place to allow employers to offer those schemes.”

Trades Union Congress assistant general secretary Kay Carberry said: “We are interested in talking about the ‘DC plus’ end of defined ambition but we are not at all convinced that any further deregulation for defined benefit will keep more DB schemes open.”

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Comments

There are 5 comments at the moment, we would love to hear your opinion too.

  1. They are already dead thanks to constant Government tinkering and tax raids!!

  2. Mr Webb, there are lots of qualifications you can do re pensions knowledge and competence. Please, please would you go and do some of them before giving forth on these subjects, you are like a chimp with a chainsaw.

  3. This man beggars belief!

  4. I feel as I’ve just awoken from a 30 year coma

    Does anyone apart from the tax payer funded public sector have a DB scheme any more?

  5. Julian Stevens 8th June 2013 at 12:00 pm

    Standing idly by and do nothing? Isn’t that exactly what you’re doing as far as all the reforms to the current pensions framework that were promised by the Conservative party as part of its pre-election manifesto pledges are concerned?

    If you had any backbone of your own instead of the Treasury’s hand up your jacksie, you’d be standing tall and talking about issues such as the annuity rates trap, restoring the dividend tax reclaim for pension funds, restoring contributions insurance, restoring pension term insurance, scrapping the punitive death tax on unspent funds in retirement, allowing those funds to pass down into RSP’s for the next generation and all the rest of it.

    But, because you’ve been told not to, you don’t, under threat of dismissal if you step out of line.

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