Michael Johnson: Why collective DC could undermine pensions freedom

A 'risk too far'

James Phillips
clock • 3 min read

Collective defined contribution (CDC) schemes risk creating "irreversible intergenerational injustice" and could undermine pension freedoms, Michael Johnson says.

Should CDC - an alternative to traditional workplace pension schemes be introduced there is a possibility that current and future employees could end up overpaying for the benefits of current pensioners, and the lack of "individual property rights" places the mooted scheme type "at odds" with pension freedoms. CDC schemes sit somewhere between traditional final salary arrangements and defined contribtion (DC) schemes and aim to better share risk between employers and employees.  In a damning report published on 30 July, the Centre for Policy Studies (CPS) research fellow and pension f...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

James Phillips
Author spotlight

James Phillips

Professional Pensions journalist from 2016-2022

More on Pensions

AJ Bell sells Platinum SIPP and SSAS business in £25m deal

AJ Bell sells Platinum SIPP and SSAS business in £25m deal

InvestAcc Group takes over £3.2bn book of business

Jenna Brown
clock 27 March 2025 • 1 min read
Spring Statement 25: 'As you were' following pensions exclusion

Spring Statement 25: 'As you were' following pensions exclusion

Pensions were notably lacking from today's Spring Statement

Holly Roach
clock 26 March 2025 • 4 min read
Majority of pension savers would use digital advice from providers

Majority of pension savers would use digital advice from providers

Some 73% of workplace pension savers want advice from providers

Jenna Brown
clock 24 March 2025 • 2 min read