The Work and Pensions Select Committee has launched an inquiry into the merits of collective defined contribution (CDC) pension schemes, and the potential role they could play in saving for retirement.
The committee has indicated it would like to see evidence on how the introduction of CDC schemes would bring benefits to savers and the wider economy. A CDC pension is a form of ‘defined ambition' scheme. It works by having a target or ‘ambition' amount it will pay out, based on a long-term, mixed-risk investment plan. The scheme differs from a defined benefit (DB) scheme in that it aims to pay out an adequate level of index-linked pension for life - though this is not a contractual guarantee. Tom Selby: Is collective DC really the Holy Grail of pensions? It meanwhile differs fr...
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