CDC schemes 'must be explicit about potential risks', PPI says

Warning from the Pensions Policy Institute

Hope William-Smith
clock • 3 min read

Collective defined contribution (CDC) schemes must clearly communicate to members how the model may put their income and benefits at risk of reduction, the Pensions Policy Institute (PPI) says.

In a briefing note published yesterday (14 June) the institute compared CDC models in the Netherlands, Denmark and Canada with plans for the introduction of CDC in the UK from this August, including a particular focus on the need for transparent and comprehensive member communications. The PPI warned that "the extent to which communications are effective" within CDC schemes was likely to inform the level of trusts members hold within the scheme overall. Senior policy researcher Lauren Wilkinson said: "Because of the variable nature of benefits within CDC schemes, clear communication a...

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