Response to DWP consultation on delivering Collective Defined Contribution pension schemes
Collective Defined Contribution (CDC) consultation a ‘welcome step’ in opening up a third way for pensions.
As the Department for Work and Pensions (DWP) consultation closes today/January 16, Smart Pension responds.
Darren Philp, Director of Policy and Communication at Smart Pension, said:
“We warmly welcome this consultation. For too long pensions have been polarised between defined contribution and defined benefit schemes, but this consultation genuinely opens up the way for the proper consideration and development of Collective DC schemes.
“While the focus of this particular consultation is quite narrow, and there are many complexities and details to work through, we hope that this consultation will be the first step in kick starting the creation of CDC schemes in the UK. We can certainly see some appetite for CDC to be offered with a master trust environment in the future, particularly in helping to manage volatility around at retirement. It is a welcome step forward.”
Commenting on the detail of the consultation, Philp added:
“Communications and expectations management around CDC will be absolutely crucial to ensure member understanding of what they are getting. This is an industry that hasn’t always communicated clearly or effectively, and we need to ensure CDC schemes are at the vanguard of best practice.”
Philp comments as the DWP’s consultation period on CDC schemes closes on 16 January 2019.