Pension inequality in DWP’s sights
09 February 2023
As Defined Benefit (DB) schemes have fallen out of favour, Defined Contributions (DC) schemes are now becoming the more popular scheme type across the UK. But there are many fearing that the DC pots of many workers will be inadequate for retirement.
The department of Work and Pensions (DWP) is therefore proposing a raft of proposals to bring DC schemes closer in line with the security offered by DB schemes. These proposals include:
- Schemes to disclose metrics such as investment performance, costs and charges using “clear and comparable metrics”
- Reforms to the charge caps and what schemes can invest in
- Seeking feedback on small pots
- Extending Collective Defined Contribution (CDC) schemes to allow multi-employer funds to be operated.
To support this, DWP has opened 3 consultations, each open from 30 January to 27 March 2023:
The value for Money consultation
The Small Pots Call for Evidence
The Collective Defined Contributions (CDC) consultation
Alongside the opening of these consultations, broadening the investment opportunities of defined contribution pension schemes consultation government response has been published. A report titled “Understanding member engagement with workplace pensions” has also been released.
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