The government has confirmed that it will launch a formal consultation into the first Collective Defined Contribution (CDC) pension schemes in the autumn.
Delivering a pensions update today, 4 September, Pensions Minister Guy Opperman said that CDC offers “interesting possibilities” as it prepares to launch a consultation.
“Finally, collective forms of pension saving offer interesting new possibilities, and the Department is currently working through proposals for the first Collective Defined Contribution schemes in the UK. We intend to launch a formal consultation in the autumn,” Opperman said.
“This is an ambitious programme of work, which has the potential to further transform the pensions landscape and benefit consumers.”
In July, the Work and Pensions Select Committee said the government should set a “swift timetable” to allow companies to create collective defined contribution (CDC) schemes.
The Committee said it welcomes the government’s intention to legislate to allow other companies to create CDC schemes, and suggested it does so using its existing powers under the Pensions Act 2011.
Royal Mail has led the intense industry debate over CDC, arguing that it would deliver the “best possible pension arrangements” for its members.
However, in a letter to Committee chair Frank Field, Centre for Policy Studies research fellow Michael Johnson said that CDC is a “wholly unnecessary adventure”, and that they should be rebranded as with-profit funds, allowing it to be “accommodated within todays legislative framework”.