I read with great interest the Professional Pensions “Buzz ” results that asked this question and found a different  result that I would have expected this time last year!

The level of “don’t knows” is low. There is a lot of conviction one way or another and there are strong voices for and against CDC as an alternative for employers

There was one comment that suggested whole of life CDC would follow the success of Retirement CDC.

There were some equally vehement responses from those who said they thought that CDC would not catch on and become an alternative to DC working plan,

There are a wide variety of views, most of which have some value. As a young proprietor of a “soon to be” CDC scheme, I will work with my colleagues on each point and put up our views on the yays and nays view, perhaps Professional Pensions will allow us to share them with a wider group than this blog gets read by.

For someone aiming to make CDC something that is well used, it is gratifying that its success or failure is a matter for so much discussion. The experience of the first movers will be very important to what happens next, The administration is the most likely place where the CDC UMES scheme will be proved.

I do not think the decision to use CDC will rest with pension managers or with DC trustees, important as these people are. Decisions will be taken in the early years by CFOs and HRDs who have much to win. I hear a lot of comments from the C-Suite that DC saving is no longer aspiring to what DB achieved. It is not helping to such a degree, attract talent, nor is it keeping employers who have talent and experience. Finally DC schemes are not creating an exit route for employees who are ready to go. There is inadequate pension from a DC pot.

But on the other side, the bulk of employers have leaders for whom pensions no longer matter (and no impetus to change from employees or their representatives). Work forces that do not recognize unions will be less likely to want to move to “collective pensions”. And there will need to be credible Schemes. In my view the high cost in time and money, to get authorized for  CDC schemes will mean that those who emerge will have products that people can with reason have confidence in.

My concern is not that there isn’t demand. I have seen plenty of demand in the past six months to suggest that there will be plenty of that. My worry is that there will not be the supply of Schemes that will rival Pensions Mutual, Arboreum and TPT. Capacity is the issue, moving to full capacity will not take many schemes so more than a handful of the large employers who we see eyeing workplace pensions up, will get immediately satisfied.

I do not expect to see much difference between the CDC schemes that will be chosen. I suspect it will come down to matching people buying with the teams selected. That is a governance issue.