CDCs: The new kid on the block

Last month’s Queen’s Speech rubber-stamped the introduction of collective defined contribution (CDC) plans. This type of defined contribution pension basically pools risk in large defined contribution schemes set up to pool a particular group of employers. The schemes are so large (usually with thousands of members) that the scheme benefits from economies of scale. In addition, the size of the CDCs often mean members can access investments they would be unable to do so on an individual basis and so have the opportunity for higher returns. Performance is based on the members and invest...