News: Latest shared-risk schemes could allay DC concerns.

Pensions Week, April, 2007

A new breed of risk-sharing pension schemes would ease concerns about the volatile payouts of defined contribution (DC) plans, say actuaries.

The Association of Consulting Actuaries (ACA) has urged the government to back the introduction of such schemes, which would spread individual risk associated with DC and give employers greater control of costs than they have under final salary schemes - for which many employers can no longer afford the liabilities.

Ian Farr, ACA chairman, said: "Shared-risk schemes will enable employers to control costs into the future, even if there are down swings in investment returns and continued improvements in mortality.

"For members, the advantages will flow from a more stable benefit platform than money...

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