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The Actuary The magazine of the Institute & Faculty of Actuaries

Pensions Bill and unintended consequences

The National Association of Pension Funds (NAPF) has written to the main political parties and the Pensions Commission chairman, warning them that changes to the regulatory framework are likely to kill off future forms of defined benefit workplace pensions including all types of schemes where risks are shared between employer and employee.

In the open letter, NAPF chief executive Christine Farnish said the current changes to the regime were well intended but risked ‘the perverse consequence of discouraging and disincentivising any form of future defined benefit provision and reducing innovation in the workplace pensions market’.

Farnish concluded the letter by saying: ‘We would urge policy makers, and all those with an interest in finding sustainable solutions to the UK’s pensions challenges, to carefully consider the likely overall impact and unintended consequences of current changes to the regulatory regime before bringing the new measures into force. Unless this is done, more modern forms of risk-sharing in the delivery of retirement savings to millions of citizens are likely to be stillborn.’

Follow up this story at www.napf.co.uk.