Customize Consent Preferences

We use cookies to help you navigate efficiently and perform certain functions. You will find detailed information about all cookies under each consent category below.

The cookies that are categorized as "Necessary" are stored on your browser as they are essential for enabling the basic functionalities of the site. ... 

Always Active

Necessary cookies are required to enable the basic features of this site, such as providing secure log-in or adjusting your consent preferences. These cookies do not store any personally identifiable data.

No cookies to display.

Functional cookies help perform certain functionalities like sharing the content of the website on social media platforms, collecting feedback, and other third-party features.

No cookies to display.

Analytical cookies are used to understand how visitors interact with the website. These cookies help provide information on metrics such as the number of visitors, bounce rate, traffic source, etc.

No cookies to display.

Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors.

No cookies to display.

Advertisement cookies are used to provide visitors with customized advertisements based on the pages you visited previously and to analyze the effectiveness of the ad campaigns.

No cookies to display.

UK. Government gives green light to CDC pension schemes

The government has confirmed the launch of Collective Defined Contribution pension schemes in a new consultation.

CDC schemes, which are already popular in Denmark and the Netherlands, pay out a regular income from a collective fund rather than producing an individual ‘pension pot’.

Last year, Royal Mail reached a deal with the Communication Workers Union which sought to launch CDC pensions in the UK.

The government has today confirmed that it will “introduce CDC provisions slowly”, starting with the Royal Mail scheme and building on this.

Several studies have shown that CDC schemes could offer more generous and predictable benefits than individual DC provisions by pooling risks, such as around life expectancy.

However some industry experts, including Aegon’s Steven Cameron, warned that there are “huge challenges in automatically enrolling individuals into a scheme with such complex design features”.

The government agreed that communicating the variable nature of the pension income in a CDC scheme will be a “huge challenge for schemes”, adding that “misunderstanding around the nature of CDC benefits will be the single biggest risk a scheme will face”.

However the government stressed that it is “very alive to this issue, and fully recognise the challenges it poses”.

Read more @Financial Reporter