Clause 19 - Introduction and definition

Part of Pension Schemes Bill – in a Public Bill Committee at 3:45 pm on 28th October 2014.

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Photo of Richard Graham Richard Graham Conservative, Gloucester 3:45 pm, 28th October 2014

The only point worth adding is that we do not need to take too seriously the contribution  from one witness that the presence of a CDC pension necessarily means that the people in it are going to get pensions that are 30% to 40% better than those who are not in it. I do not think the witness presented any credible evidence to substantiate that suggestion. The reasons for having a CDC pension are much more to do with administration, simplicity, governance and making life easy for small employers who are going to do the right thing under auto-enrolment and put their employees into a pension scheme. They are not going to be able to offer all the trappings and substance of a large trust-based scheme that has been around for the past 50 years. I see that as the main role of the CDC, and it will save money on the cost side. We all hope that the investment returns will be better, but I do no think there is any evidence to substantiate that at the moment.