The Confederation of British Industry (CBI) has called for a shift to a ‘notional defined contribution' model - effectively pay-as-you-go DC - to tackle the £1trn unfunded public sector pensions deficit.
The business lobbying organisation says an independent commission should investigate the costs of taxpayer funded benefits and establish the principles for reform. The CBI's final report on pensions before the May 6 election - ‘Getting a grip: The route to reform of public sector pensions' - urged the commission to opt for the pay-as-you-go defined contribution model successfully pioneered in Sweden 15 years ago. Under notional DC schemes, members and their employers pay contributions calculated on pensionable earnings, which are then put in personal accounts. This money is not ex...
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