Morning all,
Below i have posted some FAQ's see if we can address some of the questions you have raised. I will post more throughout the day. Hopefully this will clarify a few points, if not feel free to comment and we will update the FAQ's.
Have a good day all.
Sam
DA Team
DWP
What effect will proposed changes have on my deferred pension or pension in payment?
The DA proposals will only impact on future accruals of benefit from the date of any legislative change. Past accrued benefits of members active in the scheme are out of scope. Deferred members or pensioner members will not be affected either.
Why are you consulting on DA?
With automatic enrolment ongoing, more employers are searching the market for a model that’s right for them. DA pensions offer another option and will encourage the market to innovate and develop new models.
Why isn’t the government doing more to encourage employers to keep DB schemes?
We’re proposing to ease the regulatory requirements on employers with DB schemes so that they can manage the high costs and volatility that comes with providing a DB scheme. Many of the DA options are built on the DB model so have strong elements of DB in them.
What does Flexible DB involve?
At the minute employers can reduce potential liabilities in DB through cash balance schemes, switching to career average and capping pensionable pay.
We’re proposing to build on this by simplifying the minimum requirements for DB, so that for future accruals of benefit only schemes will no longer be required to index benefits when they are put into payment. Other examples include the ability to pay fluctuating additional benefits towards the DB pension and to change the normal pension age so employers aren’t shouldering the risks of longevity.
1 comment
Comment by robinson posted on
Would not increasing the NPA of company a pension scheme be a hinderence rather than a help,particularly in industries that do not involve sitting at a desk tapping on a keyboard. For example how many miners, steelworkers, dockers, rolling 12 hour shift manufactuing workers,construction workers and heavy engineering workers are still fit and working at 65? Most of these type of companies require younger workers, do they really want old people hanging on an extra two years impacting on productivity and employment opportunities for the young? I suppose they could "performance manage" these individuals out of the company,but that would involve additional costs as well as imposing a financial burden on the state as that person claims JSA for two years until his pension pays out!