Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • April 2019
04

Pension industry expects CDC schemes to fail

Open-access content Wednesday 3rd April 2019

Most of the UK’s pension industry expects collective defined contribution (CDC) schemes to fail, a survey by the Pensions Management Institute (PMI) has found.

2


Two-thirds of PMI members said CDCs would not succeed, with many warning that the newly-approved schemes have come too late as defined contribution (DC) pots are now well established.

And more than three-quarters believe that less than half of single DC schemes will transition to master trusts, despite alternative research suggesting otherwise.

"Our members remain sceptical towards CDC, which could have proven useful when employers first began to close their final salary schemes," PMI president, Lesley Carline, said.

"There is a risk that the appropriate time for its introduction has now passed as DC pots have become commonplace."

CDCs were given the green light by the government last month after it concluded that the schemes could provide members with higher levels of certainty and more regular payouts.

But the PMI survey findings show that a significant number of industry professionals are troubled by the direction of travel for UK pension policy.

A third said they were unsatisfied with recent developments, expressing concerns around a lack of joined-up thinking between the government and regulators.

When questioned on the government's consultation process, over one in ten respondents said the practice does not result in effective policy implementation.

Some even argued that the government often proceeds with policy in the face of significant objections.

The findings also show that a third of members think defined benefit (DB) consolidation would not be a good idea, with concerns raised about regulation and proper management.

They also questioned whether commercial operators would be able to provide consolidation propositions to the smaller schemes that would benefit most.

"While respondents felt DB consolidators will succeed and have a role to play within the UK pensions market, there is concern over governance and security," Carline continued.

"With the proliferation of consultations and the promised pensions bill on the horizon, we hope that the outcomes will reflect the input from the industry and produce effective policy addressing some of the fears noted."


Sign up to our free newsletter here and receive a weekly roundup of news concerning the actuarial profession

This article appeared in our April 2019 issue of The Actuary.
Click here to view this issue
Filed in:
04

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Part Qualified Pensions Actuary

Manchester
Up to £45,000
Reference
121150

Aggregation Analyst - London Market

London, England
£40000 - £50000 per annum + + Bonus
Reference
121149

Senior Capital Modelling Analyst

London (Central)
Up to £65000 per annum + package
Reference
121148
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2021 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200