Opperman not rushing CDC, defends statements season

[vmaxv4]

Opperman described CDC schemes as “a young beast”, and said the Pension Schemes Act, as it pertained to CDC schemes, was made deliberately complex in order that it could be “as flexible as it could possibly be”.

Though Royal Mail is currently “at the front of the queue”, the CDC regime was not created solely for its benefit, and there are “others in those types of organisations… who could potentially go down that route”, he said.

“We also want to see multi-employers, we also want to see other versions of CDCs going forward. Now, there is a degree to which you’re going to have to design this as we go along, and there is a degree to which the engagement is a work in progress.

“But we are creating something new, and [the Department for Work and Pensions] never moves too quickly. But we’re also doing it with due pace to understand and appreciate that this is something that is complicated — it’s not simple,” Opperman explained.

He cited examples of poor member communication in CDC schemes in other countries that are a cause for concern and will need to be addressed in the UK regime – a “generational impact between employees and short-term employees” that would likewise need to be solved.

“We are laying the affirmative regulations and the response to the impact assessment for publication in December of this year. The Pensions Regulator will commence consultation on its draft code of practice in the spring of next year. We will be laying the regulations and updating the guidance in the spring of next year,” Opperman said.
“The code of practice will then be laid in probably May 2022. And, obviously subject to all of these various processes, we think Royal Mail will be up and running and can come into force and will be able to submit their application in the summer of next year.”
Full report here:https://www.pensions-expert.com/Law-Reg ... on?ct=true

[renrag40]

Royal Mails CDC scheme will not be up and running before September next year at the earliest I would have thought having read the above.
Only after “probably May” when the code of practice is put in place can RM submit their application......... and as it say earlier in the piece.......... the department of works and pensions never moves too quickly.
I wouldn’t be surprised if RM CDC didn’t start until April 2023.

[vmaxv4]

Royal Mails CDC scheme will not be up and running before September next year at the earliest I would have thought having read the above.
Only after “probably May” when the code of practice is put in place can RM submit their application......... and as it say earlier in the piece.......... the department of works and pensions never moves too quickly.
I wouldn’t be surprised if RM CDC didn’t start until April 2023.

That’s a mute point
The cash balance scheme will have been running as a temporary measure for 5 years (April 2023) . With a cash sum for most employees of 25k +.
If our existing hotch-potch of scheme’s is not complicated enough we’re now in the territory of Annuity/Drawdown etc..
What a effin mess

[RobertT]

The DBCBS was first designed to work in a very similar way to AVC's – to provide a tax free lump sum, so you don't have to give up any pension to get one. Particularly good for section C members!

The plan was that it would be 'attached' to all RMSPS/RMPP benefits, but the Cabinet Office refused to allow it to be used to fund the lump sum associated with pre 2012 pensions. Therefore it's limited to RMPP(2012-2018) benefits.

In simple terms, the longer the DBCBS is in operation, the less tax efficient it becomes. Which then raises the question of, is it better to use it to fund the RMPP/NRA65 lump sum and end up paying tax on it, or transfer it out for annuity or drawdown.

On a personal note, I've never expected to be in the CDC scheme for very long and saw a potential transfer out of those benefits to my private pension as a better option than either waiting until 67 to get a very small pension or building up more cash in the DBCBS.
The way things are going there's a good chance I'll have left RM before CDC starts.