DWP confirms new Collective Defined Contribution pension scheme

[TrueBlueTerrier]

https://www.reward-strategy.com/news/to ... heme-19639

Royal Mail has already embraced the scheme, with over 10,000 employees signing up.

The Department for Work and Pensions (DWP) recently outlined a new type of pension scheme, which aims to provide better retirement outcomes and more stability in the market.

Known as a Collective Defined Contribution (CDC) scheme, the DWP has stated that it will offer savers an income when they come to retire, while also ensuring that costs are predictable for employers, reported the Express.

The scheme allows employers and employees to contribute to a collective fund. Once contributions have been made individual retirement incomes can be taken.

Commenting on CDC, Guy Opperman, the minister for pensions, said that there has been a “positive effect” on such schemes in other countries.

“It is abundantly clear that when they are well-designed and well-run, they have the potential to provide a better retirement outcome for members, and can be resilient to market shocks such as the pandemic,” he added.

The Royal Mail recently signed up to the new scheme, with over 10,000 employees at the organisation joining to take advantage of the benefits.

Following the move to CDC, Angela Gough, head of corporate pensions at the Royal Mail, explained: “(We are) committed to delivering the best possible pension arrangements for our people. We believe a Royal Mail Collective Pension Plan pension scheme would meet our objectives of providing sustainable and affordable future retirement arrangements for our people and our company.

“The DWP consultation puts us one step closer towards making our plan a reality for Royal Mail and its people. We are working closely with CWU (Communication Workers Union) and others on this important issue.”

[tractorboy2]

Less than 1/10th of the work force has signed up then ?

[Dindin]

I seriously don't want to be in this scheme. How do I opt out.

[Dindin]

Who do I write to? Sheffield HR or capita? Is the old scheme finishing? Thanks for the advice

[RobertT]

The CDC scheme doesn't exist yet, so there's currently nothing to opt in or out of!

Unless something changes, the plan is everyone with at least 1 years RM service will be auto-enrolled into CDC, and it's then up to the individual to opt out if the want to.

No doubt we'll get a load of bumf giving us all the info and our options shortly before the scheme starts.

Although it beats me why anyone would want to opt out, as you only need the maths skills of a 6 year old to realise that you can't really lose out.

[Dindin]

The CDC scheme doesn't exist yet, so there's currently nothing to opt in or out of!

Unless something changes, the plan is everyone with at least 1 years RM service will be auto-enrolled into CDC, and it's then up to the individual to opt out if the want to.

No doubt we'll get a load of bumf giving us all the info and our options shortly before the scheme starts.

Although it beats me why anyone would want to opt out, as you only need the maths skills of a 6 year old to realise that you can't really lose out.

Payments can go up or down Robert T it's obvious they will go down. Does anyone else agree?

[RobertT]

Payments can go up or down Robert T it's obvious they will go down. Does anyone else agree?

My previous comment was referring more to the amount you put in, compared to the amount you get out. And realistically you can't lose out!

By now I would have thought most people who've taken some interest in CDC will know the benefits of the pension are targeted and can go both up and down, depending on investment returns.
Anyone who thinks they won't ever go down is kidding themselves, in my opinion.

I assume you've perused the 'Anticipated CDC design booklet' and know the investments won't be at the riskiest end of the scale and there'll be a formula in place to ensure yearly reductions are kept to a minimum percentage?

[Dindin]

Cheers Robert T I've got a bit more faith in it only just.

[Dindin]

Robert T the NRA is 67 therefore we will have a massive deduction taking early.

[RobertT]

Robert T the NRA is 67 therefore we will have a massive deduction taking early.

So don't take it early!

Ultimately, which ever RM pension scheme you're in, it'll pay out a certain amount at a certain time. Just as the state pension will.

If what you're going to get from your pension/s isn't enough for you to do what you want and when you want to do it, ultimately it's up to you to do something about it. Or else work longer.

[Dindin]

Any other views?

[Fishtoft4]

Nothing more to say, again Robert hits the proverbial nail on the head. Thanks Robert

[Woody Guthrie]

If what you're going to get from your pension/s isn't enough for you to do what you want and when you want to do it, ultimately it's up to you to do something about it. Or else work longer.

The only argument put forward on this thread for this pension seems to be that it's better to be in any kind of pension than none at all which to be honest if that's the only choice we're faced with it's a pretty sad state of affairs.

It was promoted and sold to the membership as a wage in retirement...a wage not pocket money.

To be honest Robert you could use the same argument to defend a DC scheme, that's also "free money".

That's the real test, not whether members would be better off out of it because that's just silly but in 20 years will members be worse off than if they had continued in an individual DC scheme with similar contribution rates?

If that's the case and it might possibly be then the union has sold its members down the river for the sake of what exactly, ideology, face saving, bullshit?

[RobertT]

Considering we've got someone who wants to opt out and isn't really putting any meaningful arguments forward as to why they want to, then I think it's reasonable to keep it simple.

All the info on how it's proposed to work is available online, and doesn't really need to be mentioned over and over again. We're all adults and capable of coming to our own opinions.

Not every thread or argument has to please everyone!

Whether CDC ends up providing the pension it aims to do will obviously remain to be seen.
The same can be said for virtually anything else, as nobody can see into the future.

[Dindin]

Considering we've got someone who wants to opt out and isn't really putting any meaningful arguments forward as to why they want to, then I think it's reasonable to keep it simple.

All the info on how it's proposed to work is available online, and doesn't really need to be mentioned over and over again. We're all adults and capable of coming to our own opinions.

Not every thread or argument has to please everyone!

Whether CDC ends up providing the pension it aims to do will obviously remain to be seen.
The same can be said for virtually anything else, as nobody can see into the future.

Meaningful argument no 1 .it goes down and will never be high .
No 2 £24 a week we pay is a lot for pocket money
No3 £285 a year max return minus whatever percent for taking early
No4 RM money seems to disappear in the dust

No5 the scheme at the moment building up a lump sum is fine