The Collective Defined Contributions (CDC) Pensions Forum supports the policy implementation and regulation of CDC pension schemes.
The Forum is part of the RSA’s long-standing Tomorrow’s Investor programme which began in 2008. Tomorrow’s Investor examined the UK pension system and whether it could be improved to deliver better outcomes for savers and the wider economy.
After nearly a decade’s worth of meticulous research from the RSA, CDCs are firmly in sight. The CDC Forum will aim to make these a reality, acting as one voice for CDCs from across both industry and unions.
For many years we have led the work to promote lifetime pensions, in the UK and beyond. It has been central to the development of collective (CDC) arrangements. It has been a source of information and a place where interested practitioners can exchange ideas. It has been a trusted source of policy, data and advice to Downing Street, and, the DWP and to all parties in Parliament. It has gathered together pension sponsors and experts from the UK and around the globe. It has produced definitive briefings and organized significant conferences. And its efforts have been more than rewarded with the passage of the 2021 Pension Schemes Act. This will allow the introduction of collective (CDC) pensions in the UK, and it will immediately be used by the Royal Mail for its 140,000 employees.
But there is much more to be done if the full benefits of collective pensions are to be available to all pension savers. CDC pensions prevent retirees running out of savings if they live to a ripe old age. All studies suggest CDC pensions should boost retirement incomes by 30% plus, compared to the cumbersome system in the UK today. But their success depends on the coordination of many interested parties. This will not happen on its own, which is why the RSA established the CDC Pensions Forum.
Further a lot of work remains to frame secondary legislation, to help companies and worker representatives who are involved in pensions understand the advantages and pitfalls of collective pensions, to consider how multiemployer structures might best be established, and how CDC can best dovetail with today’s DC pensions, particularly in decumulation. With over £2,000 billion invested in private pensions in the UK, and a 30% upside, the prize is enormous. The Forum aims to help ensure that Royal Mail is not alone in adopting CDC, and that other can enjoy its benefits.
We are grateful to the RSA for its input and work to develop Collective Defined Contribution pensions to ensure that pension schemes work well for employers and workers. I welcome the creation of the cross-industry forum, especially as we’ll be consulting on enabling Collective Defined Contribution schemes, and we look forward to receiving their input.
The Labour front bench has given its wholehearted support to the proposed CDC scheme negotiated by Royal Mail and CWU. This ground-breaking scheme covering 142,000 workers is one of the most significant developments in Pension policy in years and will offer a better income in retirement for the employees concerned. Guy and I have worked closely together to facilitate the necessary legislation believing CDC is an option that should be open to all who so wish.
Policy briefing
For most private sector workers, it is impossible to save for a pension that will deliver a reliable, cost effective income for life in retirement. Collective Defined Contribution (CDC) pensions - enabled by the Pension Schemes Act 2021 - offer a solution to this problem.
Blog
Hari Mann David Pitt-Watson
Pension charges have long been hidden from customers. Hari Mann FRSA and David Pitt-Watson FRSA look back at the part the RSA has had to play in bringing about transparency and disclosure of costs.
Policy briefing
2020 Pension Schemes Bill: establishing collective defined contribution pensions in the UK.
Fellowship events / Research & Impact Event / Online
Online
The RSA CDC Forum's new seminar series will explore the huge opportunity offered by collective (CDC) pensions, and also the issues which will need to be managed for CDC to be effective.
Research & Impact Event / Online
Online via Zoom
Join us for the launch of the RSA Collective Defined Contribution Pensions Forum.