in Pension Funds Insider
DB schemes, Master Trusts and Collective Defined Contribution (CDC) schemes can take advantage of coming together, Ian Neale discusses the benefits.
Looking back over 2018, member protection and collective provision have been two themes connecting a handful of key developments in pensions. What the White Paper on protecting defined benefit schemes, consolidation, master trusts and Collective Defined Contribution (CDC) schemes all have in common is that coming together delivers better results.
It used to be a given that pension provision was a collective enterprise. Emerging from the paternalistic era in the 1980s, fixed-term employment contracts and self-employment (quasi or genuine) became more common. Individuals gradually acquired more options with the advent of contracting-out via protected rights, self-invested personal pensions (SIPPs), automatic enrolment and flexible access.
'Taking back control' is appealing, but with advantages also come responsibilities. Pensions professionals understand the concept of risk. The average citizen though, asked by a financial adviser 'how much risk do you want to take with your pension?' might well respond 'risk?!! I don't want to take any risks with my pension! Why would I put my savings at risk?'
Awareness is growing though, however slowly, that in the modern world where money purchase rules dominate, individual members bear all the uncertainties and risks associated with inflation, investment, longevity and so on. As awareness grows, so does the level of discomfort – and complaints. . . .
14 Dec 2018 Read the full article