At the TUC’s ABC of CDC conference, my good friend Bernard Casey of Warwick University asked Gregg McClymont, the Shadow Pensions Minister, the sources of the superior projected performance of Collective Defined Contribution pension schemes (CDC) compared to individual Defined Contribution (DC).
Pensions cannot be life long DIY projects as few of us are equipped to make them work. Forty-five years ago, I bought a Lotus Seven “car” as a self-assembly kit. I knew a lot about cars. I had previously owned a 1940s MG, a Morgan, and a Mini, and had serviced, maintained and repaired them…
In a recent post I welcomed what the government is planning on collective defined contribution pension schemes – a pension scheme that shares risk among members, smooths outcomes and provides a higher though not guaranteed pension income than traditional DC. But CDC has its opponents and critics. The ABI has attacked it – even though…
Many commentators stress the notion that “fairness” is profoundly subjective. I will offer the following simple way of measuring fairness in pension saving. The proportion of our national output that we pay in contribution savings today should equal the proportion of national output that we receive as pensions in retirement. This seems eminently reasonable for…
We are as a society living longer. We are asked to believe that this makes pensions unaffordable and unsustainable in both the public and private sectors. It is simply untrue. There is a tendency for analysts to suggest that demographics and population dynamics are undeniable, absolute truths. The fact is that over history we have…
After twenty years of ever-increasing volumes and complexity of pension regulation, a brief conversation this week with a member of the Visteon scheme brought home to me the fact that very little has really changed. After 38 years of service, this individual will lose 48% of his pension entitlement under the Pension Protection Fund rules…