Pensions Minister questioned on collective defined contribution pensions

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The Work and Pensions Committee holds its second and final evidence session on collective defined contribution (CDC) pensions, a form of pension that has recently been elevated into the realms of the possible in the UK with pioneering deal struck between Royal Mail and the postal workers union Communication Workers Union (CWU).

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More reliable income
CDC is advocated as a means of giving pension savers a better and more reliable income in retirement than individual DC plans, without exposing employers (and pensioners) to the ongoing risks associated with defined benefit (DB) schemes, the vast majority of which are running deficits.

The necessary legislative framework for CDC is not yet in place in the UK, although CDC pensions are already in operation in the Netherlands and Denmark. Royal Mail and CWU are in discussions with the Department of Work and Pensions to find a way of giving effect to their joint agreement to set up a CDC plan.

This session will cover:

the experience in the Netherlands
retirement saving culture in the UK and the appetite for CDC pensions
the mechanics of allowing people to transfer freely in and out of CDC, and whether people could “game” the system to the detriment of the remaining members
if CDC pensions fulfil their promise of offering better value than a conventional annuity, could this sound the death knell for the annuity industry?
the legislative framework needed for CDCs to be set up with evidence from Pensions Minister Guy Opperman
the governance of CDC schemes and the role of trustees
Witnesses
Wednesday 14 March, Committee Room 6, Palace of Westminster

At 9.30am

Philip Bennett, former Partner, Slaughter and May
Dr Alwin Oerlemans, Head of Pension Strategy, APG
Janice Turner, Co-chair, Association of Member Nominated Trustees
Kevin Wesbroom, Senior Partner, Aon
At approximately 10.30am

Guy Opperman MP, Minister for Pensions and Financial Inclusion, Department of Work and Pensions
Ronan O’Connor, Deputy Director, Private Pensions Policy, Department of Work and Pensions