06 November 2018

Government publishes consultation on 'Collective DC' pension schemes - comment from Steve Webb, Royal London

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Steve Webb - Director of Policy

Steve Webb

Director of Policy, Royal London

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Commenting on today’s publication of the DWP consultation on plans by the Royal Mail to offer ‘Collective DC’ pension schemes, Steve Webb, Director of Policy at Royal London said:

“Innovation in pension provision is to be welcomed, but the timetable for consultation and potential future legislation means it will be many years before a single CDC scheme could be up and running.  Designing the legislation specifically around the needs of the Royal Mail is understandable, but probably also limits the potential for other employers to implement variations on the Royal Mail model.   One of the attractions of CDC for members is the smoothing out of the ups and downs of the stock market, but in the Royal Mail’s model there is no ‘buffer’ to cushion the impact of such changes on member benefits.  This could mean pensioners seeing their pensions in payment cut from one year to the next which will present a massive communications challenge”.

- ENDS -

For further information please contact:

Steve Webb, Director of Policy, Royal London

About Royal London

Royal London is the largest mutual life, pensions and investment company in the UK, with funds under management of £117 billion, 8.8 million policies in force and 3,745 employees. Figures quoted are as at 30 June.

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