MPs want ‘groundbreaking’ pension idea adopted in UK
MINISTERS are today urged to back a new form of work pension that offers greater certainty of payout levels.
The Work and Pensions Committee welcomed an agreement between the Royal Mail and the Communications Workers Union to create a “collective defined contribution” scheme.
CDCs, popular in Denmark and the Netherlands, are a middle way between defined benefit – or final salary – schemes, in decline as firms seek to reduce their costs, and defined contribution schemes, which are riskier for staff. CDCs offer a regular retirement income as a “target”, but not a guarantee as with defined benefit schemes. MPs want the Government to let Royal Mail bring in the CDC so others can follow. “This could transform the UK private pensions landscape,” they said.