For many years we have led the work to promote lifetime pensions, in the UK and beyond. It has been central to the development of collective (CDC) arrangements. It has been a source of information and a place where interested practitioners can exchange ideas. It has been a trusted source of policy, data and advice to Downing Street, and, the DWP and to all parties in Parliament. It has gathered together pension sponsors and experts from the UK and around the globe. It has produced definitive briefings and organized significant conferences. And its efforts have been more than rewarded with the passage of the 2021 Pension Schemes Act. This will allow the introduction of collective (CDC) pensions in the UK, and it will immediately be used by the Royal Mail for its 140,000 employees.
But there is much more to be done if the full benefits of collective pensions are to be available to all pension savers. CDC pensions prevent retirees running out of savings if they live to a ripe old age. All studies suggest CDC pensions should boost retirement incomes by 30% plus, compared to the cumbersome system in the UK today. But their success depends on the coordination of many interested parties. This will not happen on its own, which is why the RSA established the CDC Pensions Forum.
Further a lot of work remains to frame secondary legislation, to help companies and worker representatives who are involved in pensions understand the advantages and pitfalls of collective pensions, to consider how multiemployer structures might best be established, and how CDC can best dovetail with today’s DC pensions, particularly in decumulation. With over £2,000 billion invested in private pensions in the UK, and a 30% upside, the prize is enormous. The Forum aims to help ensure that Royal Mail is not alone in adopting CDC, and that other can enjoy its benefits.