Member

More broadly, the UK pension system increasingly relies on employers as intermediaries in delivering long-term savings policy. The state sets the framework, but employers are the operational gatekeepers. I also hope that, in exercising this power, Ministers will ensure that collective defined contribution schemes, which we have debated in this Committee, are clearly and properly explained to employers. CDC schemes offer a different model of risk sharing. They pool longevity and investment risk across members, potentially delivering more stable outcomes than individual defined contribution arrangements while not placing open-ended balance sheet liabilities on employers, as traditional defined benefit schemes once did. If innovation is to take root, employers must understand not simply that such models exist but how they operate, what their governance requirements are, and in what circumstances they may be appropriate. It requires clarity, communication, and practical support.