Collective Defined Contributions

cobson

Unless I've missed it, I haven't seen any discussion on the board of the new CDC type of pension scheme which Royal Mail are planning. They are supposed to be a half way house between DB and DC schemes:

https://www.actuaries.org.uk/system/files/field/document/Collective%20Defined%20Contribution%20-%20what%27s%20next.pdf

Novice_investor101

It seems very few pension providers are interested in it. I'd also be intrigued to see how CDC schemes would fit in to Solvency II requirements.

JoeCrystal

And I don't think the employer will take it up unless they want to close a DB pension scheme and there is not that many private sector DB pension scheme left either. And I don't think there will be employers looking to improve their retirement provisions higher than DC pension schemes anyway.

The only way I think this might work if the sub-sector of an economy all contribute to a specific fund. I think it is more likely for the government to consider this as an option to replace the unfunded DC pension schemes with this. I would be more interested as to various scenarios, especially if the employer is no longer around or its employees stop contributing money.

Still, I will keep a very close eye on this!