Collective schemes: a false dawn for pensions

Quick Summary:

On Monday, Royal Mail became the UK’s first employer to offer a collective defined contribution (CDC) pension to staff — six years after it was originally announced.

But now the annual cost of DB pension promises has been slashed, thanks to much higher long-term interest rates, these companies have no incentive to close their DB pensions and make the leap into the CDC-unknown.

CDC sets an annual “target pension”, based on the value of assets from employee and employer contributions, plus investment returns.

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Article Details

Author / Journalist: John Ralfe

Category: MarketsFinanceInvesting

Markets: United States

Topics: Private Pension Investment Pensions Target Higher Risk Employer Assets Royal Cent

Source Website Secure: Yes (HTTPS)

News Sentiment: Neutral

Fact Checked: Legitimate

Article Type: News Report

Published On: 2024-10-11 @ 04:00:29 (3 days ago)

News Timezone: GMT -5:00

News Source URL: ft.com

Language: English

Article Length: 921 words

Reading Time: 6 minutes read

Sentences: 43 lines

Sentence Length: 22 words per sentence (average)

Platforms: Desktop Web, Mobile Web, iOS App, Android App

Copyright Owner: © Financial Times

News ID: 23030089

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About Financial Times

Main Topics: MarketsFinanceInvesting

Official Website: ft.com

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Year Established: 1888

Headquarters: United States

News Last Updated: 8 hours ago

Coverage Areas: United States

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