UK – A majority of UK industry polled by Aon Hewitt has backed an improved defined contribution (DC) system – either a collective DC model or DC-plus – as the most viable solution for the government's defined ambition (DA) agenda.
Asked where resources and effort for pension minister Steve Webb's DA drive should be focused, only one in five were supportive of the status quo.
An even smaller number believed it was wise to consider a stripped-down version of defined benefit (DB).
The consultancy said the 14% support for DB-lite suggested there would be "little or no exposure" to DB pension arrangements in future.
The Department for Work & Pensions' (DWP) 'Reinvigorating Workplace Pensions' paper from last year suggested that DB-lite could be achieved by removing all but the most basic guarantee element, potentially stripping out spousal benefits or indexation.
However, the more than 750 respondents were more enthusiastic about the prospects for improved DC-based funds.
More than one-third backed greater work on DC-plus proposals, while 32% said the DWP should investigate how viable a collective DC arrangement would be.
Aon Hewitt senior partner Kevin Wesbroom said: "It seems clear the industry believes we could – and should – try harder to deliver better outcomes for our DC members.
"The broad support for collective DC solutions was even more encouraging, and significantly more favourable than the generally negative stories one sees about these approaches."
Wesbroom argued that a collective DC model could potentially offer greater certainty of outcomes, with momentum seemingly behind such an approach despite the DWP – under the previous Labour government – ruling out a collective model as viable.
Danny Wilding of rival consultancy Barnett Waddingham previously told IPE he did not see collective DC resulting in a "massive" new legislative burden, but respondents to Aon Hewitt's poll nonetheless voiced concern about future governments amending regulation after a new system's launch.
"Regrettably, just 18% of the respondents said they did trust government not to intervene in the future – meaning that an overwhelming 82% did not," said Wesbroom.
"They have seen the pensions goalposts moved too many times to feel confident this will not happen again."
However, Webb has previously noted that any new DA approach could come with a legislative brake, allowing employers to sidestep any new and more onerous regulation.