Collective Defined Contribution Pension Schemes

Tuesday 6th November 2018 Written Statements

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Today the Government are publishing the consultation paper on collective defined contribution schemes. This sets out our vision for this new form of occupational pension scheme. We will be seeking stakeholder views on how we can best implement such schemes. CDC schemes will offer a new option for employers looking to help their employees save for retirement. A copy of this document will be placed in the Library of the House.

The UK has a world-class occupational pension system—but there are always opportunities for further innovation where this can benefit savers and businesses alike. The Work and Pensions Select Committee recently published a report calling for the adoption of CDC schemes in the UK: the Government welcomed this report and are grateful to the Committee for its support and advice. It is important to be clear that CDC schemes are not a panacea, and that members could see their pension incomes fluctuate. However, as the Work and Pensions Select Committee so clearly recognised, a robustly designed and appropriately regulated CDC regime can offer positive outcomes for both employers and pension savers. The Royal Mail and the Communication Workers’ Union are already working closely together to establish a CDC scheme, which the Government see as an encouraging sign of the consensus in this area.

Saving for retirement is an extremely important part of people’s financial planning, representing their hopes for the future. Throughout the last decade, the Government have therefore worked closely with the pensions, financial services and consumer community to strengthen the UK’s pension savings culture. Together we have transformed the pensions landscape, delivering social change on an unprecedented scale. The establishment of CDC pension schemes is a key strand of this work.

[HCWS1075]