UK pension minister calls for DB/DC debate
UK – UK pension minister Malcolm Wicks has called for a debate about the merits of defined contribution (DC) and defined benefit (DB) pension schemes.
“We need a debate about the relative merits of DB and DC,” Wicks said at an event in London yesterday. He floated the term “hybridity” to express that pension provision needn’t be either purely DB or DC.
He told a pensions debate that that the traditional final salary scheme in the UK was based on male, not female, employment patterns.
Wicks reiterated that the government has no plans to raise the state pension age, but said the idea of a uniform retirement age was “last century’s agenda”.
He also noted that the government was cold on the idea of pensions compulsion,
claiming the government would prefer voluntary strategies to work, which were “more in keeping with the times”. Wicks called for the industry to think about what the employment of the 21st century was going to look like.
And he admitted there had been a confidence crisis. “There has been a collapse of confidence over the last couple of years in what the state can do and what the market can do.”
He told the audience that the pension system in the UK was sustainable without higher taxes. He said the government is working with 61 companies on its new pension forecast idea, which will provide combined information about public and private pension provision. A further 600 companies, he said, were interested in the initiative.