Risk sharing – the Government consults
Private sector pension provision in the UK has traditionally been dominated by defined benefit (DB) schemes. However, since the DB heyday of the late 1960’s when nearly 8 million people were contributing to DB pensions, private sector employers have moved in droves towards defined contribution (DC) alternatives. Shared risk schemes are seen as potential alternatives to (or the middle ground between) the opposing models (in terms of risk) of DB and DC. Following a highly publicised campaign by the Association of Consulting Actuaries (ACA) (amongst others) in support of shared risk schemes, the Government has finally launched a consultation seeking views on their viability. The consultation closes on 28 August 2008.