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CDC Pension "could deliver improved returns for millions"

Millions of workers could eventually benefit from better retirement savings when a new type of pension scheme is introduced to the market, under pioneering proposals rubber-stamped by the Work and Pensions Secretary.

Amber Rudd backed plans for the first Collective Defined Contribution (CDC) scheme in the UK after the pensions industry, insurers and other bodies welcomed the move proposed by Royal Mail and the Communication Workers Union (CWU).

CDC pension schemes offer a regular retirement income by allowing group contributions to be pooled together and invested to give members of the scheme a higher final benefit level. It also means much better long-term protections for members because risk is shared. The new schemes are expected to appeal to companies who want to offer strong pensions provisions to employees without having to hang on to enormous pension liabilities.

Read DWP - Delivering Collective Defined Contribution Pension Schemes