UK pension professionals are increasingly exploring emerging retirement solutions, with almost half looking at retirement collective defined contribution (CDC), according to a survey from WTW.

Its poll found that 49 per cent of pension professionals were considering retirement CDC, but were at different stages.

Nearly a third (31 per cent) were aware of the concept of retirement CDC but remained at an early stage, while 18 per cent said they had a ‘fair’ level of knowledge or had explored it in come depth.

While many were looking at retirement CDC, the survey indicated there was scope for greater understanding of how it could work in practice and contribute to schemes’ retirement propositions.

Meanwhile, 39 per cent of respondents said they were at different stages of exploring ‘fix then flex’ retirement solutions.

More than three quarters (78 per cent) of pension professionals planned to review their DC provision over the next few years.

Just 2 per cent did not plan to conduct a review, while the remaining 20 per cent said they were unsure.

WTW said this suggested an active market for future retirement solution discussions and education.

When asked which features would be most important when assessing the suitability of a default, stability of income was the most popular consideration (30 per cent), followed by keeping it simple for members (28 per cent) and higher expected income (23 per cent).

“Retirement CDC has the potential to play an important role in helping schemes provide members with an income throughout retirement,” commented WTW scheme actuary, Shriti Jadav.

“These findings show that while a large segment of the market is still at the early stages of exploring these options, there is a growing demand by schemes to look at innovative new ways of providing members with an income in retirement.

“What comes through clearly is that schemes are looking for solutions that members can understand and rely on, without placing the full burden of complex retirement decisions on the individual.

“The next step is for trustees and sponsors to assess the options available and determine which approach best meets the needs of their members.”

WTW head of UK pensions investments, Pieter Steyn, added: “The focus on stable income does not mean low returns.

“Retirement CDC allows assets to remain invested collectively for longer, with investment and longevity risks shared across the membership rather than managed by each individual in isolation.

“The scale and longer investment horizon of a collective arrangement can also support investment in a broader range of growth and productive assets. This can help schemes pursue stronger long-term outcomes for members while supporting the wider productive finance agenda.”

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