Shared risk pensions advocated

Mon, 23 Apr 2007

The government has been urged to support a new "third way" for pensions by an industry expert.

Speaking at a dinner for senior pension figures, Ian Farr, chairman of the Association of Consulting Actuaries, argued that introducing a shared risk scheme would "re-energise" the employer-sponsored company pensions sector.

And he suggested that they could sit "comfortably" alongside defined benefit and defined contribution pension schemes.

Outlining his support for the pension type, Mr Farr explained what advantages it can offer to both employers and employees.

"Shared risk schemes will enable employers to control costs into the future even if there are downswings in investment returns," he said.

"For members, the advantages will flow from a more stable benefit platform than money purchase provides."

In other pensions news, the past month has seen chancellor Gordon Brown face criticism for his decision to scrap pensions tax relief shortly after assuming the position in 1997.

Last week, Mr Brown survived a vote of no confidence in the House of Commons - 298 MPs voted in favour of the chancellor while 233 voted against him, amid criticism from shadow chancellor George Osborne.

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