The Association of Member Nominated Trustees has welcomed the inclusion in this weeks Queens Speech of legislation to create collective defined contribution pensions.
The AMNT, a voluntary organisation that represents and supports member-nominated trustees, directors and employee representatives, has been campaigning for CDCs since its inception four years ago.
Barry Parr, AMNT co-chair and a member of the Department for Work and Pensions' working group on defined ambition, said he was 'very pleased' that the government had recognised the benefits of the CDC model.
'Investing collectively gives economies of scale, access to a wider range of asset classes and lower administration fees. CDC also takes away the need for an annuity and, perhaps most importantly, it can remove a huge amount of uncertainty from pensions. It presents a big opportunity for innovative approaches, especially from mutual bodies, trades unions, master trusts and employer groups.'
But he acknowledged that challenges remained, including how CDC would be defined, the level of reserves required and how benefit structures would operate.
Parr's co-chair, Janice Turner, said: 'In our view people really just want three things from their pension: a reasonable idea of what level of pension they may eventually get; one which gives them the best value for their contributions over the years; and a simple pension they can trust. CDC can deliver on these.
'There has been some negative comment in the press this week citing reductions in Dutch CDC pensions - but they have still produced a better pension for the same money.'