The Department for Work and Pensions (DWP) has published a
consultation on its proposals for a new alternative model to the
traditional defined benefit (DB) and defined contribution (DC)
occupational pension scheme structures. The "defined
ambition" (DA) framework has been developed with input from
the pensions industry, and the DWP is now seeking views on its work
to date.
The consultation, entitled "Reshaping Workplace Pensions for Future
Generations", outlines three broad categories of pension
scheme models, namely flexible DB, collective DC and guaranteed DC
arrangements.
Flexible DB
According to the DWP, the end of 'contracting-out' of
pension schemes (following the creation of a single-tier state
pension) presents an opportunity to simplify the complex
legislative regime for DB pensions. As such, the DWP is
proposing to remove the statutory requirement to provide annual
index-linked increases to pensions in payment. This change
would apply in relation
