I know we have had this report for nearly a month but it amazes me every time I read that number. Here’e Gallagher’s boss speaking to Corporate Adviser

More than three quarters (76 per cent) of those in the pensions industry are assessing, exploring or expect to explore collective defined contribution within three years, according to a Gallagher survey of 250 employers, trustees and pensions professionals.

Around half (52 per cent) of respondents said that they would be comfortable being an early adopter of CDC. Additionally, 53 per cent claimed that they would be most likely to consider a multi-employer or master trust CDC arrangement.

Almost nine in ten (86 per cent) stated that a sector-wide CDC arrangement would be appealing. Among respondents working with schemes of fewer than 250 members, only 51 per cent are exploring CDC within three years.

David Piltz, chief executive of Gallagher’s benefits and HR consulting division, says: “While many in the pensions industry are already on board, including key individuals at employers, that alone isn’t enough: moving CDC from ‘interested’ to ‘implement’ will require winning over wider stakeholders – unions being a key example.

That is perhaps the most important win for CDC. Far from needing to be “won over” the unions who I speak to every day want CDC every time it’s presented as an alternative to defined contribution workplace pensions.

Of course, progressive advisers can see an opportunity here to explain to employers the pension advantages (and disadvantages) of CDC . The advantage is more pension , the disadvantage less freedom as to what to do with their pot of pension cash.

“For employers and trustees, the next step is to understand whether CDC could help address a specific pension challenge within their organisation. This means testing the model against workforce needs, existing pension arrangements, governance capacity, and the evidence needed to support a decision.”

All this as well of course, but you ask a C-suite executive of large employers with big workplace pension bills and they will tell you they don’t think they are getting value for money from defined contributions.

1. Staff don’t see them as deferred pay and nor do their representatives – pensions do not reward.
2. It’s money down the drain when it comes to collective bargaioning
3. They can’t offer older staff the door with any degree of certainty they can afford to retire.

Workplace Pensions have been  low on the priority list for large employers as they struggle to meet bills from the trustees of their legacy DB pension schemes. That’s over now and they can get back to non-guaranteed collective pensions.

Workplace pensions are money paid to be compliant with auto-enrolment and there the interest runs out. Until now that is. Now over three quarters of employers find collective pensions more exciting than what they’e paid since they made their DB pension plans “paid-up”.

This should not be a surprise but it is. That’s because I forgot how exciting collective pensions (CDC) can be. Thanks Gallagher for reminding me!