Pension minister Steve Webb will back Dutch-style collective defined contribution pension schemes in the UK as part of his proposals for reshaping the pension market.
The Department for Work and Pensions 'defined ambition' consultation last year put forward CDCs as one possible way to provide savers with more certainty over their retirement income, while taking some of the risk away from employers.
CDCs, which currently can not operate in Britain, would allow private sector workers to 'club together' in the same way that public sector pensions allow teachers and nurses to.
The Times said Webb and Work and Pensions Secretary Iain Duncan Smith want the plan to be included as the 'centrepiece' of a Pension Bill, to be included in the coalition's final legislative programme before the election in May 2015.
'Some of the best pension schemes in the world are run on a collective basis. I would like to see British workers have access to schemes run on this basis,' Webb told the paper last night.
A DWP spokeswoman added: 'We believe one model being proposed could provide employees with greater stability in their pension outcomes without the employer taking on any pension risk themselves. CDCs are already running successfully in Denmark and the Netherlands - two countries whose pension systems are ranked among the best in the world.
'With its fixed contributions, this looks like a DC pension from the employer's perspective; for the individual, it provides them with a degree of certainty in retirement income well before the individual actually comes to retire.'
Speaking with The Actuary, Barnett Waddingham said it backed the introduction of CDC schemes in the UK.
Partner Danny Wilding said: 'These schemes can offer a higher degree of risk sharing between members (and potentially employers) that is unavailable with other scheme designs.
'Additionally, various recent studies have demonstrated that CDC schemes can provide better, more stable outcomes than ordinary defined contribution schemes due to greater freedom of investment and lower charges once scale is achieved.'
He added that benefit design could be tailored to reduce the 'intergenerational risks' that are likely to be a symptom of these schemes.
'But, legislation may be needed to allow these schemes the freedom to operate efficiently.'
Last year, the Institute for Public Policy Research think-tank called for the government to introduce CDCs in to the UK. Its report claimed that collective schemes allow pensioners to get a retirement income that's around a third higher than traditional DC pensions.
Speaking today, Imogen Parker, a research fellow at the IPPR, said CDCs were by far the most popular option for pension reform among the public. 'By sharing risks associated with pensions amongst savers, keeping finances invested for longer, and offering a retirement income straight from the investments, these pension schemes cut out the annuity process altogether,' she said.
Tom McPhail, head of pension research at Hargreaves Lansdown noted that any pension model that claims to be able to boost pension payouts at no additional cost or risk was always going to prove popular.
But he added: 'The arguments in favour of these schemes (CDC) are unproven. There is clear evidence both from recent Dutch experience and from our own with-profits funds that such schemes can go down as well as up. They are complex, uncertain, unproven and rely on a constant flow of new members for their long-term sustainability.
'We believe that much can be done to improve the existing UK pension system. A well-judged price cap on auto-enrolment schemes, reform of the regulations on the sale of annuities and the promotion of long-term investing would all have long lasting and beneficial effects.'