Darren

Nico

I’ll do as I’m told by TPR and my compliance officer and stop listening to people who are fans of CDC. Instead I’ll listen who hate CDC and this who are as biased as apparently I am in wanting to solve “adequacy” by building pension schemes that pay more income.

I am fortunate in having every Saturday morning the trenchant opposition to CDC to listen to from the brilliantly clever Nico Aspinall and the slightly more moderate Darren Philp. They kick off this week’s podcast with a 2o minute lambast against CDC now being able to take bulk transfers of people’s money , exchanging  wealth  for pension (or at least mainly for pension).

This session is advertised about the Pension Commission but I’m glad that we don’t arrive at that till the last quarter. Before that we have criticism of CDC, megafunds and the Marxism of the current Government, all of which makes it very balanced for me as I prepare to speak at a union conference tomorrow.

I am surprised that the talk on CDC focusses on retirement CDC. To my mind Retirement CDC is tomorrow’s issue. The DWP kindly dropped use this information

‘The Occupational Pension Schemes (Preservation of Benefit) (Amendment) Regulations 2026’ have now been laid (3^rd June) and published to: http://www.legislation.gov.uk/id/uksi/2026/580

The consultation response and SI have been published: Retirement Collective Defined Contribution pension schemes – GOV.UK

And the updated guidance: Occupational pensions: Bulk Transfers without Consent of Money Purchase Benefits without Guarantees – GOV.UK

What is important to us now is that money can transfer from DC scheme to CDC scheme as a DC transfer. If CDC is a type of DC and not a version of DB or something quite new, then VFM should include CDC – shouldn’t it?

As I mentioned, Nico does not see this as right. I’d be interested to hear someone address the question of VFM across the types of DC schemes, perhaps we will hear more from Government or its Regulators in due course.

We cannot consider CDC as an irrelevance.  I understand from BlackRock’s talk last Wednesday (Professional Pensions) BlackRock reckoning that only a third of money in DC will move to CDC which suggests that two thirds of the money will stay in DC and the trustees agree with Nico.

My balanced view is that trustees who consider income the major advantage of CDC will transfer to CDC while those who see flexibility rather than adequacy will stay in DC.

Some major DC schemes , including Nest and L&G – two of the three schemes who have reached the scale to be called megafunds, will retain the flexibility of DC -these are L&G and Nest. It will be interesting who make the move and who will be able to move DC money without member’s consent. These documents suggest there is no capacity to bulk transfer by default money in contract based plans. There are big workplace pensions, including BT which are written under GPP.

I think there is space for Nico’s differing views though it is hard for DC workplace pension trustees not to consider CDC even if rejecting it.

There is in this podcast much to like and relatively little about Arsenal. I suggest that much will need to be done to get the Pension Schemes Act and the CDC legislation acted upon. We have the Pension Commission to work on and publish its definitive response in a year. There may be time for action to be taken by this Government but I doubt it will take precedence over the secondary legislation from the Pension Schemes Report. This is in part relating to DC but also deals with LGPS, surpluses and I hope will include help for those who have no increases on their pensions as they commenced prior to 1997.

Then of course we have Suzy Morrissey’s report into the state pension age which is now urgent to be reviewed, it’s predecessor sitting in an unpublished state somewhere in the DWP.

I hope all this will be covered by Nico and Darren as “value for money” has a wider relevance than to DC pots!