The majority of pensions industry professionals do not believe that collective defined contribution (CDC) schemes will be a success in the UK, new research from the Pensions Management Institute (PMI) has found.

PMI’s study, which surveyed industry professionals, revealed that 67 per cent of respondents did not believe that CDC would be a success.

It also found that respondents “expressed concerns” that the moment for CDC schemes to succeed “had passed, as individual DC pots are now well-established”.

Speaking about the findings, PMI president Lesley Carline commented: “Our members remain sceptical towards CDC, which could have proven useful when employers first began to close their final salary schemes.

“However, there is a risk that the appropriate time for its introduction has now passed as DC pots have become commonplace.”

The research also revealed that there was still some scepticism regarding pensions consolidation, with 33 per cent of those surveyed saying that they did not believe that DB consolidation was a good idea.

Respondents cited concerns about the need for careful regulation and proper management, with some questioning whether commercial operators would be able to provide consolidation propositions to smaller schemes.

Carline continued: “Whilst our respondents felt DB consolidators will succeed and have a role to play within the UK pensions market, there is concern over governance and security, and a note that they will not help out smaller distressed DB schemes that need a solution to their woes.

“That said they are not marketing themselves as saviours but as an alternative to traditional options.”

Furthermore, 77 per cent of participants thought that less than half of DC single trust schemes would transition into master trusts.

One third (30 per cent) said that they were concerned with the direction the UK pensions industry was heading, citing worries around “a lack of joined up thinking between the Treasury, DWP and the regulators.”

Twelve per cent of respondents said that the government consultation process does not result in effective policy implementation, with some arguing that the government will sometimes proceed with policy despite significant objections.

Carline concluded: “With the proliferation of consultations and the promised pensions bill on the horizon, we all hope that the outcomes will reflect the input from the industry and produce effective policy addressing some of the fears noted in the survey response.”

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