Sophia Singleton, head of DC consulting at Aon Hewitt, said: “I can see these type of solutions be default solutions. You have those three distinct elements to your savings. And it’s packaged so you don’t have to work out when to buy an annuity or income.”
Aon Hewitt also said the product would only be sustainable for people with funds worth at least £50,000.
The regulator has been calling for more innovation in the pension space since pension freedoms were implemented in April three years ago.
But so far little has happened although government backed workplace pensions provider Nest launched a blueprint for a retirement income strategy similar to the Australian model in June 2015.
Aon Hewitt believes employers have shied back from innovating for fear of being the first in the firing line while providers were still catching up on pension freedoms.
Pete Glancy, head of policy at Scottish Widows, said the problem with CDCs was more of a market issue.
He said: “For CDCs to have any traction in the UK it will most likely be across very large workforces where the typical worker has a job for life.
"Over a lifetime, an individual will have around 11 different employers, with a mix of pension schemes comprising defined benefit, occupational defined contribution, personal pension and possibly also master trusts.
"Introducing another and quite complex ingredient for those with multiple jobs and pension pots could make the picture much more complicated.”
Nathan Long, senior pension analyst at Hargreaves Lansdown, said the problem lay in the final design of CDCs.
He said. “You need to have the ability to transfer out of CDC for it to be compatible with pension freedoms and we anticipate many would favour the ability to personalise their retirement rather than being tied into a product for life.”
The industry has been fiercely critical of default drawdown solutions as proposed by MPs, saying one size fits all would not work in drawdown and it would lead to more consumer disengagement in retirement.
Mr Long said the idea of deferred annuities would need to be factored into the overall scheme design.
"It will be almost impossible to get someone to voluntarily part with money to pay for a guaranteed income to kick in from an age they may never reach.”
Alistair Wilson, head of retail platform strategy at Zurich, agreed it would be difficult to convince consumers of the merits of deferred annuities.
"Our recent research found just 5 per cent of people currently in flexi-access drawdown see an annuity as the solution in later life, suggesting the annuity market still requires a lot of modernisation."
Ricky Chan, director at IFS Wealth & Pensions, said: "My experience with guaranteed investment products or the like is that they typically aren’t worth paying the premium for.
