UK Pensions Secretary Backs Collective Defined Contribution Plans
Amber Rudd said new type of pension should ‘deliver improved investment returns.’
The UK’s Work and Pensions Secretary Amber Rudd said she supports allowing Collective Defined Contribution (CDC) pension plans in the UK, a decision that was welcomed by postal services provider Royal Mail and the Communication Workers Union (CWU).
“These pioneering proposals should deliver improved investment returns for workers and savers while cutting costs and red tape for British job creators,” said Rudd. “The new type of pension is currently used in Denmark and the Netherlands—two countries widely recognized as having among the best pension systems in the world.”
CDCs are a type of retirement saving plan that differs from defined benefit plans in that the employee is not promised a certain retirement income, but instead has a target amount the plan will pay out based on a long-term, mixed-risk investment plan.
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