Webb promises to look again at risk-sharing

Pensions minister Steve Webb has signalled that the government will revisit the issue of risk-sharing as part of its drive to reinvigorate occupational pensions.

Speaking at the annual LCP Pensions Conference yesterday, Webb (pictured) said the Department for Work and Pensions would encourage the development of models which would relieve individual members of some investment risk.

"Some people say that pendulums don't stop in the middle," he said. "But once we've gone from the DB extreme where the employer shoulders all the risk, to the DC extreme where it's all borne by the member, hopefully we can push it back a little bit."

He said this would form part of the government's pledge to reinvigorate workplace pensions alongside measures to reduce costs, address legacy problems, and overhaul member transfers.

This comes as Webb reiterated the government commitment to eradicate short service refunds from the pensions landscape - warning employers not to fact them into their decision making process when setting up schemes (PP Online, 7 September).

Webb described short service refund as a "troubling feature of the system" as they did not fit with the government's aim of getting the population to save more for retirement

He said the department would explore all the options on dealing with them including ensuring pension pots defaulted to a single provider when members changed employers, or insisting funds are transferred to new employers' schemes.

"My vision is that instead of having lots of little pots, people will end up with one big fat pot, which would help them see the value of their pension and encourage them to shop around," he explained.

He also reiterated his call to stamp out bad practice when conducting enhanced transfer value exercises and confirmed the results of the call for evidence would be released this autumn.