Pension funds have urged the government to press ahead with its defined ambition proposals, saying they a once in a generation opportunity to overhaul the tax and legislative system for pension schemes.
In November, the Department for Works and Pensions proposed introducing greater risk sharing as part of moves to remove regulatory constraints from the pension system. The proposals are intended to providing people with more certainty about what they will get in retirement through greater flexibility in defined benefit schemes, risk sharing and risk pooling, or collective defined contribution.
The National Association of Pension Funds warning comes on the same day that the DWP's consultation on defined ambition closed.
NAPF head of policy Helen Forrest said this legislative framework would 'alleviate the administrative burden and costs of contracting in so the NAPF urges the government to co-ordinate the timing of legislation for the new DA framework to support these employers'.
She added that the NAPF was 'pleased' the government consulted on the creation of sustainable DB and innovative DC schemes, which is expected to better balance the risks of saving between pension scheme members and their employers. She added that this should create a genuinely 'mixed' economy of pension provision.
'Defined ambition offers a once in a generation opportunity to overhaul the tax and legislative system for pension schemes and develop a framework that allows a variety of models to flourish in the future and meet the needs of our changing, and ageing, society,' she said.
She added that the DA proposal would not be for everyone and it was 'vitally important that the schemes people are currently saving in are fit for purpose,' particularly as the number of people auto-enrolled into workplace pension schemes increased.
'The government and the industry must step up efforts to improve transparency around charges and ensure all schemes have effective governance in place,' she said.