Government risk sharing consultation welcomed but NAPF urges swift action to relieve pressure on existing defined benefit schemes

The National Association of Pension Funds (NAPF) has welcomed the announcement (21 February 2008) by the Government that it will be consulting on the issue of conditional indexation and risk sharing in June 2008. However, it urges the Government to include legislation in the current Pensions Bill to enable the quick introduction of any changes resulting from the consultation.

NAPF Chief Executive, Joanne Segars, said: “We welcome the Government’s commitment to retaining good quality defined benefit pension provision. NAPF members have said loud and clear that the single most important thing the Government could do to ensure the future of this provision would be to lighten the regulatory load, including greater risk sharing.

“Any such move for new schemes and for future accruals in existing schemes will be an important step forward in ensuring the third of private sector defined benefit schemes that today are open to new members, stay open.

“The Government should not delay. There is a clear urgency to ease the pressure on defined benefit schemes because over the last few weeks the renewed stability in the defined benefit sector has come under threat.

“We urge the Government to consider taking powers in the current Pensions Bill to allow a swift legislative conclusion to the outcome of this consultation.”

On Thursday 21st February, the Government rejected an amendment to the Pensions Bill which provided the necessary regulations that would enable the introduction of risk sharing in defined benefit schemes. This amendment would allow any changes to be introduced more quickly through Parliament.


ENDS


Notes to Editors

Figures from the NAPF Annual Survey (2007) showed that 31% of defined benefit schemes remain open to new members. The figures for 2006 and 2002 were 33% and 70% respectively.

The NAPF is the leading voice of workplace pension provision in the UK. Some 10 million working people are currently in NAPF Member schemes, while around 5 million pensioners are receiving valuable retirement income from such schemes. NAPF Member schemes hold assets of around £800bn, and account for approximately one fifth of investment in the UK stock market.


Journalists requiring further information, please contact Mark Brooks via

020 7808 1312 mark.brooks@napf.co.uk 07917 506683


Mark Brooks
Head of Press
Tel: 020 7808 1312 07917 506 683
Fax: 020 7222 7585
http://www.napf.co.uk


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