Pensions  

Pensions Bill will be reduced version

CDC schemes will also be included in the bill, according to Mr Dromey. 

CDC schemes differ from DB pensions in the sense they do not guarantee certain incomes in retirement.

Instead, CDC have a target amount they will pay out, based on a long term, mixed risk investment plan.

These schemes also differ from the traditional DC plans in that they do not produce individual pension pots. Instead they invest savings in a larger collective pot, which provides an income to individuals during their retirement.

Mr Dromey said: "First and foremost we will seek to defend historic DB schemes and do not approve of the current direction of travel with the number of DB schemes dwindling.

"Unless we are careful, there could be a major problem with people entering retirement with inadequate pension schemes. This is why CDC is a step in the right direction."

Regarding the pensions dashboard, the shadow pensions minister said that it was crucial to alert people to what they are entitled to in retirement.

Pension dashboards will ensure people throughout the UK have easy access to key information about what pensions they have, who manages them and what they are worth.

The government confirmed in December it will introduce multiple pension dashboards, with the first one, developed by the Money and Pensions Service, expected in 2019.

Mr Dromey said he would prefer to have just one publicly administered dashboard.

He added: "The principle behind the pensions dashboard is a good one, even if in practical terms it will be a nightmare to make work."

amy.austin@ft.com

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