The chairman of the Association of Consulting Actuaries is voicing strong recommendation for pension risk sharing schemes in the face of concerns over UK pensions.
Ian Farr highlights risk sharing schemes as a key means of encouraging pensions, maintaining that the government should do more to support such programmes in the future and calling for the development of a "politically non-controversial" risk sharing plan.
He claims that for lower paid workers, the replacement of final salary schemes with money purchase schemes could be unfeasible.
"For many, money purchase arrangements will mean either high volatility in returns or low returns, depending on the risk individuals are prepared to take … The volatility of money purchase pensions for those on lower incomes can be very worrying."
Mr Farr argues that risk sharing schemes offer a workable alternative, lifting the burden that can be imposed by final salary schemes.
"I believe there is serious interest in a new regime for risk sharing schemes," he states, adding, "Such a regime could also help to ease the growing polarisation between private and public sector pensions."
A new report from the Association of British Insurers suggests that many UK workers are failing to adequately save for retirement, whilst a large percentage of employers lack faith in government plans over the introduction of personal accounts.
Risk sharing schemes for pensions could be beneficial, says Farr
Pensions Quote Line
0845 108 0505
Risk sharing schemes for pensions could be beneficial, says Farr
Thu, 23 Nov 2006
Recommended links
State pension not enough, expert warnsPension reforms still leave shortfall, expert claims
Final salary pension schemes a popular perk, study shows
NAPF comments on pension schemes
Get help with planning your pension
Todays top providers of pensions
Guide to pension planning
Pensions.co.uk is part of a large network of financial sites created to help advise you on life events, such as buying a house, Mortgages.co.uk; insuring your car - CarInsurances.co.uk; your life - LifeInsurance.co.uk; and your home - HomeInsurance.co.uk.
1998 - 2008 UK Pensions - Planning before, at the onset and during retirement.
| pensions news |
|---|
| Government will protect pension holders - Tue, 06 Jan 2009 |
| Pension investors told to consider hotel rooms - Wed, 24 Dec 2008 |
| Pensioners will see a boost to their income - Mon, 15 Dec 2008 |
| More News |
Pensions Newsletter
Please enter your email below and subscribe to our monthly newsletter
Save on Your Mortgage
Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.
Protect Your Health
Find Critical illness, Life and Private Medical Insurance PMI policies.