12 April 2019
AHC (ANTHONY HODGES CONSULTING LTD), THE PENSIONS AND BENEFITS
COMMUNICATION SPECIALISTS, SAID THAT, IN ORDER TO EFFECTIVELY AND POSTITIVELY
COMMUNICATE CDC, EMPLOYERS SHOULD MITIGATE AGAINST MEMBER INSECURITIES
AROUND RISK BY FOCUSING ON COLLECTIVE SHARED EXEREINCE CDC PROVIDES.
Karen Partridge, Head of Client Services – UK and Australia at AHC commented: “The recent proposal from the Department for Work and Pensions on the wider implementation of CDC was a big step for the industry. A common issue for DC members has always been a feeling of being ‘alone’ in making investment decisions but CDC, by its very name, is a collective – it’s all about shared experiences, shared resources, shared opportunities and shared outcomes. Therein lies the key to positive engagement – getting people to see themselves as part of a community of like-minded savers on a journey to reaching a retirement goal. CDC’s increased focus on target setting will also come into play here, giving the industry an opportunity to help people recognise their accountability for their future savings. Showcasing this accountability as part of a totally shared experience will help people see this as a lesser burden than in a DC arrangement, for example. CDC offers a drive towards growing income in retirement that we all want to support people in achieving. By homing in on these aspects of human psychology in the onboarding stages and beyond, employers can help set their workers on the right path to achieving better outcomes down the line.
“Clearly CDC is not an entirely straightforward concept and it will be important to carefully explain how it differs from other types of savings vehicles. Whilst some in the industry, as ever, will remain sceptical until the final detail is announced, the more forward-thinking will be encouraging employers to think about how they can use the collective experience to their advantage when engaging members with a new scheme. And, ultimately, we can all spend a lot of time finding faults with new solutions or we can try and positively engage with innovation and evolution and develop the relevant tools and techniques to support its success, and a better outcome for people in retirement.”
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