Collective action: the future of pensions

Employees could soon be enrolled into a new, more generous type of pension after Royal Mail was given a green light to set up the first collective defined contribution scheme.

The government said that the Pensions Regulator’s approval was a “landmark moment”.

“This is just the beginning. We have seen the positive effect of these schemes in other countries and our plans will enable more pension savers to achieve the retirements they want,” the Department for Work & Pensions said.

Collective defined contribution schemes, which are used widely in the Netherlands, Denmark and Canada, are supposed to offer a halfway house between the old final salary (or defined benefit) schemes and the less generous defined contribution pensions that most workers have now.

In a collective