UK - Employers must be allowed to adapt their defined benefit schemes to the changing demographics, said National Association of Pension Funds (NAPF) chief executive Christine Farnish.
Speaking at the NAPF annual conference, Farnish said many DB schemes were 70% more expensive to provide than had been anticipated.
She noted the scheme retirement age had not changed despite scheme members living longer and that it was therefore apparent that the government needed to review the regulatory framework for such schemes.
“Unless we can unwind some of the additional requirements imposed on schemes over the years we face an increasingly unstable situation,” said Farnish, pointing out that a fair deal must still be delivered to existing DB scheme members.
She highlighted the risk of employers seizing their first chance to level down future pension provision to the minimum required by the government’s new pensions savings scheme, rather than make voluntary provision themselves.
“Government cannot avoid this issue indefinitely and must take steps to tackle it head on,” the NAPF CEO concluded.
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