CDC Pensions - a complex solution that delivers simplicity for employees complexity is the bugbear of getting people to save for their retirement. The need to save is easily explained, but the simplistic solutions of the past, at least to the retiree, of defined benefit pensions and state pensions are either no longer viable (DB schemes) or are under huge pressure from changing demographics (state pensions). The new approaches being undertaken to resolve the level of under saving in the retirement market are a lot more demanding of financial expertise.
Three months after shaking up the pensions market, the government has decided it’s time to do it again. Following the complete ‘liberation’ of the pension market announced in the budget, heralded by the abolition of the compulsion to purchase annuities with pension pots, the government has decided that they will introduce Collective Defined Contribution (CDC) schemes, commonly called ‘Dutch-style collective pensions’ from their popularity in the Netherlands, into the UK market.