DWP announcement Retirement Collective Pension Scheme measures

Commenting on the Retirement Collective Pension Scheme measures announced today, Lauren Branney, Head of CDC at Hymans Robertson, says:        

“This is a major moment for workplace DC pension savers. Retirement Collective Pension Schemes (RCPS) can deliver a secure income for life in retirement, which our research tells us members’ welcome. While there are trade-offs in relation to flexibility and leaving a legacy, the chance to deliver a higher income in retirement is an opportunity that will work well for many, especially with the retirement income adequacy challenge we see today for DC savers.

Coupled with Guided Retirement the industry now has the means to harness the power of scale in delivering a default savings solution for DC members all through retirement. Flexibility and choice is important and will be retained under the new regulations. But by empowering trustees and pension providers to deliver an income from DC as a default it removes the difficult decision-making burden from savers while retaining choice for those who prefer a different approach.

Communication and engagement will remain as important as ever and the industry will need to work hard to get the design and delivery model right to operate at scale across workplace pension schemes.

The prize is worth it and coupled with the launch of multi-employer whole-of-life CDC schemes next year the future looks far brighter for savers not part of the DB pension world. We look forward to engaging with the RCPS consultation and helping shape a framework to deliver good outcomes for members."

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