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{
    "id": 800389,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/800389/?format=api",
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    "content": "Labour and Social Welfare took over the issue of the pension scheme and published the same Bill that was signed by the stakeholders. That is the Bill that is currently before this House. If I may quote Salome Nichieri who did some seminal work on transferring defined benefits schemes to defined contribution schemes. I want to note that retirement benefit schemes, for the benefit of Members, are designed as Defined Benefit Schemes (DBS) or Defined Contribution Schemes (DCS). More recently, we have hybrid schemes which have both features of a DBS and a DCS scheme in varying degrees. However, more often than not, hybrid schemes are defined as Defined Benefits Schemes because of the guarantee component of what you get after the period. The main differentiator is that a DBS sponsor shoulders all the risks associated with the scheme and in the DCS system it is the individual employees who bear all the risks. Members might be aware that we are transitioning most of our DBS schemes. They are close to any new members. The members who are currently there are being served until their close. A circular was issued and that is being entrenched now in this law. Internationally, more schemes are being transitioned in that manner in the United Kingdom (UK) and the United States of America (USA). In fact, they moved in the 1970s or 1980s – I will confirm – to what we call individual schemes and what they call the 401(K) case. That is more of where the world is moving. Of course, the choice of the scheme design vests with the sponsors of retirement benefits schemes in many instances with the professional advice of actuaries, which is a field that I am a bit in the know of. Sponsors include employers, government institutions such as insurance companies and associations or organised groups. Generally, a sponsor is the legal entity that sets up a scheme. The focus of this desk research is limited to employers in the private sector as sponsors of occupational schemes. In the private sector, employers voluntarily sponsor the establishment of occupational retirement benefit schemes for their employees. Mr. Deputy Speaker, Sir, the move towards establishing this umbrella pension scheme got many challenges in the last House. This was mainly because of lack of clarity from the stakeholders and the fear of the future. This is why we took it upon ourselves, as a Committee, to make sure that we involve all stakeholders in public participation, listen to all their concerns and make sure not one side gets 100 per cent of their wishes and none gets zero per cent. So, there has been a lot of give and take and the Committee has considered positively many of the amendments proposed by all of those who came before us. We shall be presenting that to the House at the Committee Stage during consideration of this Bill."
}