Industry acceptance increasing for new style of pension
LONDON, 26 April 2021 – Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, has said that polling during a recent session on Collective Defined Contribution (CDC) schemes, held as part of Aon’s 2021 Virtual Pensions Conference series, demonstrated how the new style of pension scheme is gaining significant support among the UK pensions community.
Key results of the polling included:
- 38% of employers said they would consider offering CDC for their employees to build up a pension
- Only 7% were against offering CDC
- 48% of the audience would consider offering a CDC pension to their DC scheme members at retirement
Chintan Gandhi, head of Collective DC at Aon, said:
“Aon has been prominent in its support of CDC, so the results of our conference session polling were very encouraging. CDC is still an entirely new form of pension design in the UK – and one that isn’t even properly here yet. Nevertheless, the support shown in this polling testifies to how the UK pension industry is seeing the potential value that CDC can provide to both employer and member outcomes.
“It was great to see that 38% of employers would consider providing their employees with a CDC pension and the advantages of its features. These include a target income for life in retirement from fixed cost DC savings, delivered in a way that saves employees from having to make complex financial and investment decisions.”
Chintan Gandhi continued:
“CDC has clearly had a long gestation period but the first set of regulations and guidance on ‘own trust’ CDC schemes are set to be in force by the end of 2021. Further regulations and guidance covering wider forms of CDC, such as multi-employer and decumulation-only designs, including through master trusts, will soon follow. The dawn of a new pensions era is finally upon us."
Notes to editors
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