What's Happening?
A new report from Hymans Robertson highlights a strong interest in collective defined contribution (CDC) schemes among pension savers and employers in the UK. The report suggests that CDC can offer better
retirement outcomes by sharing risks and improving value. It calls for government and industry support to develop diverse CDC models that are scalable and inclusive. The report emphasizes the potential of CDC to transform retirement outcomes and strengthen the social contract between generations.
Why It's Important?
CDC schemes represent a significant opportunity to address pension inadequacy in the UK. By offering a more secure retirement income, CDC can enhance financial stability for retirees and reduce the burden on employers. The report's findings underscore the need for innovative pension solutions that balance risk and reward. As the UK prepares for regulatory changes, CDC could become a cornerstone of pension provision, offering a more equitable and sustainable approach to retirement planning.
What's Next?
The development of diverse CDC models may lead to increased collaboration between government, industry, and employers. As CDC schemes gain traction, stakeholders may explore new investment strategies and communication methods to support their success. The report calls for prioritizing CDC in pension reform efforts, suggesting that it could play a key role in shaping the future of retirement provision in the UK.
