CDC legislation update

[RobertT]

Assuming approval, are we talking weeks before it comes in? I'm wondering if it's worth putting our pay rise into the Flexi plan before it closes.

There's no set timetable for Royal Assent once a bill has made it's way through Parliament, so we don't know when that will happen yet, although it is a formality. Once it's given, I assume it'll take a while before the RM scheme is set up.

There were a few news articles before Christmas suggesting implementation during the second half of 2021. I can't really see that being brought forward too much, but that's just my opinion.
We'll just have to wait see when it happens!

[RobertT]

Once the CDC comes in and AVC stops,probably time for me to look for another savings account to build another fund for my retirement.

And a slightly different approach too, particularly from a tax point of view and how and when you access it, as it won't be attached to your RM pension benefits.
A personal pension will still attract tax relief, but not PSE, and can still be tax free on the way out too, but timing and management is more important.

I take it the AVC payment will probably stop automatically, I would imagine before CDC comes in the trustees will write to all of us as to what will happen next.

I expect one of those A4 booklets detailing what CDC is all about and how the current arrangements will be managed going forward. Personally I'd be amazed if the current AVC arrangements don't stop, probably on the last week we pay into the RMPP/DBCBS.

From what I understand so far the CDC has an NRA of 67 which I'm not too keen on.

I don't think anyone is!

[Hawkey99]

Just wondered if there is any reason that a "new kind" of extra payment (like our current AVC) can be made by us into the new scheme ?

[RobertT]

Just wondered if there is any reason that a "new kind" of extra payment (like our current AVC) can be made by us into the new scheme ?

The original proposal was for us to be able to contribute an extra 1% of pensionable pay into the lump sum element of the scheme, the DBLSS, which would be matched by RM.

At the moment we don't know if that will actually be the case, and will be an extra cost to the business they might not be willing to take on.

An AVC along the lines of Flexiplan is possible, but as the CDC/DBLSS scheme aims to be similar to section B of the RMPP(pension & lump sum), you could argue that having another lump sum wouldn't be very tax efficient, once you've reached a certain amount/percentage.

As CDC aims to be similar to a DB scheme, there could be the potential to buy extra years, similar to the old Addplan.

In practice we'll just have to wait and see what, if anything, happens with regards to future AVC's into CDC.

[heapsy]

Once the CDC comes in and AVC stops,probably time for me to look for another savings account to build another fund for my retirement.

I take it the AVC payment will probably stop automatically, I would imagine before CDC comes in the trustees will write to all of us as to what will happen next.

From what I understand so far the CDC has an NRA of 67 which I'm not too keen on.

I've been thinking the same. As I already have a S&S ISA, I'm looking at either adding to the existing funds, or starting two new ones, maybe a FTSE 250 and an S&P 500 tracker. If I wanted, I could easily take those as cash, along with the AVCs.