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ARTICLE · 10 JULY 2014

Government Moves Fast On Shared Risk And Collective DC

The Government has published its proposals for the reclassification of occupational pension schemes in the Pension Schemes Bill.

United KingdomEmployment and HR

It was only announced in the Queen's Speech on 4 June, but already the Government has published its proposals for the reclassification of occupational pension schemes in the Pension Schemes Bill.

The Bill introduces a new category of "shared risk scheme" into pensions legislation (the term "defined ambition" has been axed). It is proposed that in future there will be three main categories of scheme:

Defined benefits scheme A full pensions promise in relation to retirement income and other benefits and a fixed normal pension age.
Shared risk scheme A pensions promise in relation to at least some of the retirement benefits.
Defined contributions scheme No pensions promise in relation to any of the retirement benefits.

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