contracting out

Public sector pensions will cost taxpayers an additional £9bn a year due to a ‘toxic' combination of the Public Service Pensions Bill and state pension reform, a Centre for Policy Studies paper shows.

The state pension reforms announced yesterday have been widely welcomed as a much-needed simplification, but where there are winners, there must be losers.

The Department for Work and Pensions is under pressure to speed up plans for a ‘defined ambition' middle-ground, as experts predict the end of contracting out could spark a wave of defined benefit closures.

Employers will have temporary powers to change scheme rules without trustee consent, in a bid to protect defined benefit schemes from the cost of abolishing contracting out.

Prime Minister David Cameron denied the end of contracting out will create a wave of further closures of final salary pension schemes.

This afternoon the government will unveil its long-awaited state pension white paper, revealing decisions on the future of contracting out and increasing the state pension age in line with life expectancy.

The end of contracting out for defined contribution will save schemes £5.3m a year in administration costs, the government claims.

In the final part of our run-down of the most read Professional Pensions Online articles in 2011, we look at the rest of the top 20 news stories during the year - those in first to tenth place.

Pensions minister Steve Webb has vowed to fulfil the government's promise to reinvigorate occupational pensions by deregulating the defined benefit sector.

Complications associated with the changes to the contracting-out regime should trigger scheme sponsors into reviewing their benefits they want to offer, a consultant says.