Application for CDC not until summer of 2022

[RobertT]

https://www.law360.com/articles/1439055 ... ion-scheme

The government has said that Royal Mail will be able to apply from next summer for its retirement savings plan to move to become a new collective defined contribution arrangement, becoming the first of its kind in the U.K.

Guy Opperman, the pensions minister, told MPs on Monday that the deadline for the application will depend on finalized regulations and an approved code of practice being published next spring.

Collective defined contribution, or CDC, schemes are risk-sharing pension plans that are new to the U.K., although they are widely used in Canada and the Netherlands. The government established a legal framework for their creation in the Pension Schemes Act, which was passed by Parliament in February.

Opperman said that the Department for Work and Pensions would launch "affirmative regulations" next month, which would be finalized early next year. The Pensions Regulator will launch a consultation in the spring in parallel to that, which Opperman said would be published by May.

"Subject to all of these various processes, we think Royal Mail will be able to submit their application in the summer of next year," Opperman told MPs on the parliamentary Work and Pensions Committee.

The government said it hopes that such retirement savings plans will be a "third way" alternative to Britain's two major types of workplace plans: traditional final salary-type arrangements, known as defined benefit schemes; and defined contribution, in which the benefits of members are affected by the investment performance of the scheme.

The Royal Mail Collective Pension Plan will be the first of the new schemes to launch in Britain. The postal service said last year that its proposed CDC scheme is likely to show a 70% improvement in protecting the benefits of its members than a defined contribution plan and 40% better than a defined benefit arrangement.

The Royal Mail did not immediately respond to a request for comment.

The government wants to broaden the regulation after the Royal Mail's scheme launches to allow multiple companies to join the same collective benefits plan.

Opperman told the MPs that regulations for so-called multi-employer CDCs were being developed alongside those for single-employer schemes, which will cover the Royal Mail plan.

"There are capacity issues, this is not simple, but we definitely want to make progress on multi-employers at the same time," he said.

Opperman added that the regulations would still likely be some way off. "It's certainly going to be a year, there's no question whatsoever, and I suspect it will be beyond that," he added.

[NWpostie]

More time to bang as much money as you can into your Flexiplan scheme before it closes.

[heapsy]

And those of us who want to retire at 60 wont have as much in this new scheme, which suits me.

[Jefferson Starfish]

And those of us who want to retire at 60 wont have as much in this new scheme, which suits me.

You won't have any more pension in the current scheme either.

[freespeech]

And those of us who want to retire at 60 wont have as much in this new scheme, which suits me.

You won't have any more pension in the current scheme either.

Cash balance fund will be very strong though. Will cover the tax free lump sum of my NRA65 pension with ease.

[heapsy]

And those of us who want to retire at 60 wont have as much in this new scheme, which suits me.

You won't have any more pension in the current scheme either.

Up until it actually closes I'm still paying AVCs, so I will in a round about way.