I am pleased , when looking for this blog’s comments, to find some brilliant comments by Pensions Oldie and Peter Cameron – Brown and Derek Scott. The older commentators that this blog has, are very special to it. Here is Pensions Oldie speaking out on CDC
Perhaps we should consider a role for unions and trade and professional bodies here.
It appears the logical conduit for employees of multiple employers, particularly small employers and the self employed, to obtain the benefit of CDC. It is also the model followed in may other countries, Australia, Holland and Canada spring to mind.
This would tend towards the non sectionalised TPT model and, although it may seem heretical in this respect, can we think of the Church of England as a trade body!
For the employer – there would be no difference between CDC and DC, except perhaps a commitment to an industry standard contribution rate.
If an employee could insist on a CDC contribution as part of the employment contract terms it would remove the small pots and pension transfer problems overnight.
I quite agree that unions should be a part of the conversation about CDC and they have been advocates for it to date. That said, they have a brief to preserve what is left of DB. My hope is that they will lobby for the distribution of the surpluses that it’s estimated 75% of DB pension schemes have. I hope that surplus will be used to make CDC as good for future pensioners as the DB scheme has been. It need not be a menace to the sponsoring employer.
The unions are having a pensions conference as they do each March and this one will be on March 5th,
I am pleased to have been asked to a meeting of union folk at the end of April to talk with Terry Pullinger on how a Pensions Mutual can be used to offer CDC to all kinds of employers.
I do not think that a large employer should not be prevented from having their own sections but as it costs £77,000 as an authorisation cost to be paid to TPR, I would not expect many employers to have their own section. I think it will be more sensible for employers with experience of pensions to participate in a mutual than take on responsibility for a CDC scheme within their DB schemes – but that is a good conversation to have. I am happy to see CDC delivered whatever the way.
TPT have their own way forward and I wish it well. It is vital for CDC that there are several options open to employers offering different ways to participate.