This is the clip that was sampled for  Primal Scream’s Loaded

“Just what is it that you want to do?”

“We wanna be free.

We wanna be free to do what we wanna do, and we wanna get loaded and have a good time.

That’s what we’re gonna do, we’re gonna have a good time, we’re gonna have a party!”

This is the abstract of The Pension Policy Institute’s paper

Both Collective Defined Contribution (CDC) and Collective Individual Defined Contribution (CIDC) schemes place any risks on pension scheme members instead of an external risk-bearer.

In CDC schemes, assets are pooled collectively, allowing for risks to be shared between pension scheme members.

In Individual DC schemes (IDC), the scheme members bear such risks individually.

But CDC’s collective nature leaves little room for individual risk management and the pension assets are allocated to scheme members via rules that are often complex and ambiguous.

CIDC schemes strive to retain the desirable aspects of CDC and IDC schemes, while improving on some of the drawbacks.

The drawbacks of a CDC scheme are mitigated by the introduction of

1) individually quantifiable pension pots through individual accounts,

2) individual risk management and

3) a simplified scheme.

The drawbacks of an IDC scheme are mitigated by

1) mandatory participation,

2) collective management of assets, and

3) sharing of risks.

It therefore seems that CIDC schemes have a number of important advantages over CDC schemes.

CIDC scheme members should be clearly informed of their legal position vis-à-vis their employer and pension provider, and the contract should clearly define the risks.

Scheme members appear to benefit from individual risk management and individually identifiable pension pots, while employers and/or pension providers seem relieved from risks and enjoy the security of fixed pension contributions.

The possibility to take out a lump sum seems contrary to the collective sharing of risks in both CIDC and CDC schemes.

 It’s the same argument.

You cannot have total freedom (IDC) and total certainty (DB). CDC offers you the shades of certainty that are right for you.

But “you” in this context, represents a collection of us – a “collective”.

If you watched the clip at the top (please do) then you’d have seen Peter Fonda from the film The Wild Angels. The Hell’s Angels collective is free to party, but there’s something wrong with Fonda, he seems frightened and vulnerable for all his talk. There’s clearly something wrong with the Minister too, his collective is out of sight.

We need to find just what we want to do.

Somewhere between the Minister and Peter Fonda, somewhere between DB and individual DC, is the sweet spot that represents the amount of freedom we want and the order offered by conventional (DB) pensions.

Testing for that sweet spot is what now needs to happen. One test bed is the Royal Mail , the sampling may have to be wider. We may have to build a CDC plan (or CIDC as the paper insists) just for the Royal Mail and build another plan for the general purpose of the UK public. What is clear is that if we allow a thousand flowers to bloom in the Defined Ambition garden, we will have a great garden and nothing to retire on.