https://www.express.co.uk/finance/perso ... ion-scheme
Ministers will today(15th December 2021) launch a new type of pension scheme designed to give workers increased confidence about their retirement income.
Collective Defined Contribution (CDC) pensions are expected to provide a hybrid alternative to defined benefit and defined contribution schemes. Under the proposal, employers and employees pay into a collective savings pot which will eventually be used to fund retirement pay. Officials say CDC pensions give employers predictable costs while remaining more resilient against economic shocks, such as those caused by the pandemic, than defined contributions schemes that are becoming increasingly common.
Pensions Minister Guy Opperman will lay regulations in the Commons today to begin establishing the legal framework for the new pensions. He said last night: “I am very pleased that these schemes will soon be able to operate in Great Britain.
“We have seen the positive effect of these schemes in other countries – and it is abundantly clear that when they are well-designed and well-run they have the potential to provide a positive outcome for savers, and can be resilient to market shocks. I have no doubt that millions of pension savers will benefit from CDCs in the years to come.”
Collective Defined Contribution pensions are common in other countries including the Netherlands and Canada. But in the UK all workplace pensions are either Defined Benefit, linked to salary or length of service, or Defined Contribution where pensions are based on how much an employee pays in.
Mr Opperman added: “I know that when saving for retirement, it shouldn’t be a choice between security and affordability. And the new Collective Defined Contribution scheme can help millions of savers find the right balance.
“These new schemes offer an alternative to the status quo by combining a reliable income in retirement for members, with predictable costs for the employer, as well as building in more resilience against economic shocks such as those caused by the Coronavirus pandemic.
“We’ve seen these schemes work overseas in countries such as the Netherlands and Canada, and I’ve been making the case for some time that well-designed and well-run CDC schemes have the potential to provide a positive retirement outcome for savers.
“I’m pleased that the regulations to introduce CDCs are being put before Parliament today, and I hope they can play their part in improving the retirement of those who work hard all their lives to build up a pension”
The regulations being laid today have been drafted to provide criteria for the Pensions Regulator to authorise and supervise CDC schemes. And postal workers could be the first to benefit from the innovation after backing for the idea from Royal Mail and the Communication Workers Union.
Department for Work and Pensions officials are expected to continue discussions with employers, unions and other interested parties about setting up more CDC schemes.
The Pension Schemes Act 2021 includes an authorisation and supervision regime to allow CDC schemes to be established once today’s regulations come into force. Rules are designed to ensure only schemes that are well run and built on sound foundations will be allowed to operate, according to DWP officials.
Schemes must have a clear strategies and resources to deal with any problems that may arise as well as an effective framework for communicating with members. The new regulations are expected to come into force next August following votes by MPs and peers in the New Year.
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Latest news on CDC regulations
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RobertT
- EX ROYAL MAIL
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Latest news on CDC regulations
Links to all RM pension related websites are here
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freespeech
- MDEC
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Re: Latest news on CDC regulations
https://www.pensionsage.com/pa/CDC-legi ... t-2022.php?
1st August
The government has confirmed that draft legislation for single or connected employer Collective Money Purchase (CMP) schemes will come into force from 1 August 2022, subject to parliamentary approval.
In the government response to its recent consultation on the draft regulations, the Department for Work and Pensions (DWP) highlighted the plans as a "huge step forward", confirming that it will also lay draft regulations making the necessary consequential and miscellaneous changes in February 2022.
1st August
The government has confirmed that draft legislation for single or connected employer Collective Money Purchase (CMP) schemes will come into force from 1 August 2022, subject to parliamentary approval.
In the government response to its recent consultation on the draft regulations, the Department for Work and Pensions (DWP) highlighted the plans as a "huge step forward", confirming that it will also lay draft regulations making the necessary consequential and miscellaneous changes in February 2022.
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RobertT
- EX ROYAL MAIL
- Posts: 6644
- Joined: 09 Sep 2007, 14:26
- Gender: Male
Re: Latest news on CDC regulations
Freespeech:
There's many different stages towards the implementation of CDC, as this further article explains.
The latest consultation on the matter hadn't even finished when the article you linked to was published!
That consultation resulted in some changes!
https://www.pensionsage.com/pa/CDC-legi ... t-2022.php
The government has confirmed that draft legislation for single or connected employer Collective Money Purchase (CMP) schemes will come into force from 1 August 2022, subject to parliamentary approval.
In the government response to its recent consultation on the draft regulations, the Department for Work and Pensions (DWP) highlighted the plans as a "huge step forward", confirming that it will also lay draft regulations making the necessary consequential and miscellaneous changes in February 2022.
The government has made some changes to the regulations in light of industry feedback, confirming, for instance, that it has re-drafted the definition of connected employer to be more in line with the policy intent, and to mitigate confusion that arose from the use of 'joint venture' as well as the transfer of active members between connected employers.
The authorisation and ongoing supervision of CMP schemes, also commonly referred to as collective defined contribution (CDC) schemes, will be administered by The Pensions Regulator, which is expected to consult on a draft Code of Practice and operational guidance to support employers in January 2022.
This Code of Practice is also expected to provide more detail on the processes that will be used to calculate fees for applications in respect of schemes with more than one CMP section, while the guidance will provide illustrative examples around how the fees or additional applications would be set.
Commenting in the foreword of the government’s response, Pensions Minister, Guy Opperman, highlighted the development as “the culmination of four years’ worth of work”.
He said: “These regulations will be a huge step forward in providing a major enhancement to the existing occupational pensions landscape and a third way forward between traditional defined benefit and post 2012 defined contribution schemes.
“By allowing pension scheme members to share investment and longevity risk, and by ensuring that employers have predictable pension costs, CDC schemes will mean scheme members can be confident of an income in retirement that, whilst not guaranteed, will provide them with good value from the contributions they and their employer have made.”
Opperman also said that he was “greatly encouraged” by the number of industry responses to the consultation that indicated a “real desire” to extend the benefits of CDC to more employers and their workers.
As such, he confirmed that whilst the prime focus will remain on ensuring CDC is available for single or connected employer schemes from next year, the DWP has already begun engagement with interested parties to understand their proposals for multi-employer schemes.
The consultation also confirmed that once there is clarity as to what these parties want to achieve and how they may deliver this, the DWP will look to work to arrive at a consensus on what a potential legislative framework for these schemes might look like.
"It will be important to learn from the lessons of operating single or connected CMP schemes in live running as well as carefully consider any potential risks that may arise in extending this provision," it stated.
The update was also highlighted as "great news for Royal Mail, the Communication Workers Union and Royal Mail employees", having been the first company in the UK to look to introduce a CDC scheme for its staff.
There's many different stages towards the implementation of CDC, as this further article explains.
The latest consultation on the matter hadn't even finished when the article you linked to was published!
That consultation resulted in some changes!
https://www.pensionsage.com/pa/CDC-legi ... t-2022.php
The government has confirmed that draft legislation for single or connected employer Collective Money Purchase (CMP) schemes will come into force from 1 August 2022, subject to parliamentary approval.
In the government response to its recent consultation on the draft regulations, the Department for Work and Pensions (DWP) highlighted the plans as a "huge step forward", confirming that it will also lay draft regulations making the necessary consequential and miscellaneous changes in February 2022.
The government has made some changes to the regulations in light of industry feedback, confirming, for instance, that it has re-drafted the definition of connected employer to be more in line with the policy intent, and to mitigate confusion that arose from the use of 'joint venture' as well as the transfer of active members between connected employers.
The authorisation and ongoing supervision of CMP schemes, also commonly referred to as collective defined contribution (CDC) schemes, will be administered by The Pensions Regulator, which is expected to consult on a draft Code of Practice and operational guidance to support employers in January 2022.
This Code of Practice is also expected to provide more detail on the processes that will be used to calculate fees for applications in respect of schemes with more than one CMP section, while the guidance will provide illustrative examples around how the fees or additional applications would be set.
Commenting in the foreword of the government’s response, Pensions Minister, Guy Opperman, highlighted the development as “the culmination of four years’ worth of work”.
He said: “These regulations will be a huge step forward in providing a major enhancement to the existing occupational pensions landscape and a third way forward between traditional defined benefit and post 2012 defined contribution schemes.
“By allowing pension scheme members to share investment and longevity risk, and by ensuring that employers have predictable pension costs, CDC schemes will mean scheme members can be confident of an income in retirement that, whilst not guaranteed, will provide them with good value from the contributions they and their employer have made.”
Opperman also said that he was “greatly encouraged” by the number of industry responses to the consultation that indicated a “real desire” to extend the benefits of CDC to more employers and their workers.
As such, he confirmed that whilst the prime focus will remain on ensuring CDC is available for single or connected employer schemes from next year, the DWP has already begun engagement with interested parties to understand their proposals for multi-employer schemes.
The consultation also confirmed that once there is clarity as to what these parties want to achieve and how they may deliver this, the DWP will look to work to arrive at a consensus on what a potential legislative framework for these schemes might look like.
"It will be important to learn from the lessons of operating single or connected CMP schemes in live running as well as carefully consider any potential risks that may arise in extending this provision," it stated.
The update was also highlighted as "great news for Royal Mail, the Communication Workers Union and Royal Mail employees", having been the first company in the UK to look to introduce a CDC scheme for its staff.
Links to all RM pension related websites are here
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vmaxv4
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Re: Latest news on CDC regulations
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renrag40
- Posts: 423
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Re: Latest news on CDC regulations
Well done Terry!!!!
Will you be joining us in this brave New world of pensions?
Or will you be happy enough to carry on with the tens of thousands of pounds that we, the membership, pay into your pension scheme, on your behalf?
Serious question Terry if you are looking in.