The big issue in the DC/CDC debate so far has been about the future not the past. Royal Mail with their collective pension scheme have yet to transfer DC pots that postal workers have built up with them.

The Retirement CDC excitement is not for what happens in the future but about what can be preserved of the past. If you cannot transfer till you reach your retirement, your savings has been pot-pot-pot, since you started!

Aon will launch in 2028 inside a DC master trust. Even the one UMES CDC plan (the type that build up pensions) that’s spent money to launch , does so  with a DC master trust that will work in  tandem .

In short there is very little talk in town about the kind of CDC we already have as a way of transferring existing pots into what are , in practice , deferred or immediate pensions.

A change of mood starts at the top, the Director of Private Pension at the DWP

Government have legislated  CDC  for what WILL be contributed to a collective pension but also for what HAS been put in the saver’s pot!

In June, the DWP published an important paper that encourages those who are developing CDC Collective Pensions to consider taking on the existing pots that employees may have in own company occupational DC schemes, in master trusts and eventually in GPPs.

Today I have a meeting with a union and this topic will be at the top of the agenda. The unions have cottoned on that if CDC is simply forward looking , then there members pension savings in pots and will not grow with the certainty of a promised pension.

Sure the certainty isn’t as high as in DB but the quid per quo is that employers are keen to do it , especially if pensions come into collective bargaining on pay. But for unions I speak to, the past twenty years has seen first the closure and then the buy-out of private sector DB plans. In their places are pots that are proving increasingly difficult for union members to convert to pensions. I say increasingly because the size of the problem has increased as each year of saving progresses. Some DC pensions set up to replace DB have been running more than 20 years now.

The question we’ll be discussing today is whether the pots can be transferred to pensions now and what the value will be for members. This is a much more cogent argument for unions than it is for those who just discuss collective pensions as going forward. I suspect that if the commercial master trust community see collective pensions as an alternative to guided retirement from 2029, a means for some to handover their pot at retirement. This sits within their business models.

What doesn’t sit within the commercial DC providers (whether master trust or GPP) is bulk transfer of existing money from savers some of whom will have some years to go before getting to retirement.

There is very little open discussion going on about the transfer of member’s pots in the trade press nor will there be, until CDC schemes who have no split loyalties to DC and collective pensions choose to.

To discuss this sensitive subject they must decide whether transferring pots of those working (and even those who no longer work) for the employers who’ve elected to switch to collective, can be bulk transferred.

It is going to take a deal of conviction for employer and proprietor of the collective pension to make that happen. It is going to need a decision by DC scheme trustees and it will need advisers to fall in line with unions and employers who already see bulk transfers from DC to CDC as a good idea