The global solution for human resource professionals, combines custom research, strategic white papers, country primers, webinars and OnDemand educational programs, and the expert guidance...
By Sarah Jones
July 1—The U.K. will introduce Dutch-style collective defined contribution plans that pool risks for members, the third change to laws governing the savings market and insurance companies administering the plans in as many months.
The Private Pensions Bill will allow “defined ambition” plans “encouraging greater risk sharing between parties and allowing savers to have greater certainty about their retirement savings,” according to a speech read by Queen Elizabeth II in Parliament earlier this month.
“My government's pension reforms will also allow for innovation in the private pensions market to give greater control to employees,” the queen said.
The Pensions Tax Bill will allow people over age 55 to withdraw savings without the requirement to buy an annuity, as announced in Chancellor of the Exchequer George Osborne's budget in March. Earlier this year, the U.K. capped the fees that defined contribution funds are allowed to charge savers.
“We wonder whether the introduction of rules to allow collective defined contribution arrangements in the U.K. is a bridge too far for employers and the pensions industry,” given the other changes so far this year, Stephen Bowles, the head of defined contribution plans at money manager Schroders PLC, said in an e-mailed statement.
While Pensions Minister Steve Webb said on his department's Twitter feed this week that the British government could “learn from other countries,” Tony Clare, a pension advisory partner at Deloitte LLP, noted that Dutch-style collective defined contribution funds have drawbacks as well as benefits and can cut payments should deficits rise. In 2013, for example, 55 out of 415 Dutch funds reduced their payouts.
To contact the reporter on this story: Sarah Jones in London at firstname.lastname@example.org
To contact the editor responsible for this story: Rick Vollmar at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)