CDC scheme investments?

Post by **stephen500** » 28 Feb 2020, 17:33

I wonder how this new CDC scheme will invest it's money and what will be the long term effects of moving markets over a decade or more? [url https://www.theguardian.com/business/20 ... 1582910323" onclick="window.open(this.href);return false; /url]

Post by **RobertT** » 28 Feb 2020, 18:44

A lot of the money will be invested in equities.

A decade isn't really that much time in the world of pensions. Someone joining the CDC scheme at age 20 for example, might not actually take it until they're 67, and their money won't be fully out of equities until they're 90(source: the Anticipated CDC design booklet).

heapsy · Post by **heapsy** » 29 Feb 2020, 10:56

If a lot of the money will be invested in equities, why wasn't this done before with previous schemes?

Post by **RobertT** » 29 Feb 2020, 12:52

heapsy wrote:If a lot of the money will be invested in equities, why wasn't this done before with previous schemes?

It was!

If you still have your past copies of the trustee reports, those that come with the annual illustration, you'll see that going back to the 1990's the final salary scheme was invested in equities by as much as 84%.That percentage steadily declined to a low of 10% by 2012.
2019's report had a figure of 26% in 'return seeking assets'.