I have stated that Royal Mail is not consolidating its own DC scheme into its CDC scheme just yet. It is I hope waiting for the conclusion of the drama that is being made out of DC, whether by individual or bulk transfer. It shouldn’t be that way, it is not my reading of the DWP’s guidance on this
Here’s the seasoned judgement of Derek Scott on transfers from DC schemes;
Cowardly capitalism reigns today it seems
Royal Mail’s Royal Mail Collective Pension Plan does allow members to transfer out their accrued benefits, but the structure of a Collective Defined Contribution (CDC) scheme means calculations are said to be “complex”.
Unlike traditional DC plans with standalone personal pots, CDC assets are pooled, meaning transfer values depend heavily on member age, target benefits, and market performance rather than a simple cash balance.
Royal Mail does not allow members to transfer external DC pots into the Royal Mail Collective Pension Plan because UK regulations for single-employer CDC structures are built strictly around ongoing joint contributions, and legal frameworks for “Retirement CDC” inbound transfers of external pots are still pending government consultation and rollout.
This is frankly pathetic.
When we set up the Stagecoach DB scheme from April 1987 we were accepting transfers in from legacy nationalised industry schemes and LGPS within a matter of months despite what were turbulent asset markets following Black Monday (19.10.87). And if members wished to transfer out (few did) that was also anything but “complex”.
The actuarial work involved was neither difficult nor expensive.
Cowardly capitalism reigns today, it seems.
It is important that money can move from CDC to DC and from DC to CDC without great fuss. It is clear that those who own the money (in DC) want it to stay there and will work hard to make it hard for it to move. Meanwhile proprietor’s like us have already worked out terms to transfer out of CDC. We see this as part of our transparency and are prepared to be challenged on their fairness.
The “Challenger” label that we have found made of commercial CDC schemes is based on a trust we shall be transparent and fair in what we do. If we do not we will get nowhere in an environment well regulated and with due diligence to come from actuarial consultants.
We need a free flow of money around the system as change takes hold
Collective Pensions have come a long way since October of last year when workplace CDC was launched. We should not allow the cowardice of capitalism to hold up further progress.