There were two concurrent shows on CDC, the first organised by Aptia, the second by Pensions UK. There was no plenary session but numbers suggested that there could have been one and well attended too.

The first has been well documented, the second – delivered in the dying hours of the conference and up against alternatives sounds fascinating. Whether you were in the room or not , you might like to read these notes from a delegate who was kind enough to send them to me for publishing.

Simplifying CDC – a concurrent session at 10.10 on Thursday 15th  #PensionsUKAC26

Session expertly chaired by John Ball CEO of Church of England Pension Scheme at Pensions UK Conference this Thursday which followed on from the session in the main conference auditorium from Torsten Bell Pension Minister.

The prequel to the CDC session had been Torsten Bell

Quick In brief on the Pension Minister,  he set out the policy of government with the triple lock again graphically showing how the new simpler universal pension policy had driven up the value of the state Pension from 23% of median average earnings from its doldrums in the 80’s and 90’s to 30%. 

The new triple is designed to keep the proportion at this point and then policy is to work to improve second pillar pensions from their using recommendations from the pension commission publishing in February and then working with industry to run harder to build trust from working people and deliver better outcomes.

He was aware that with some of the needed changes there would be consequential frictions and un comfort in some areas for many in room but that the intent and outcome at the end had to be the focus… Again, CDC hit the main platform as the intended care workers CDC was championed.

He held the floor and was assured, authoritative on top of industry issues and offered absolute clarity of his brief…

The Conferences  “main event” brought our delegate immediately to a session on simplifying CDC (or collective pensions as you like)

So…. back to the 4  sages in the simplifying CDC session all wearing different hats to look in ‘collectively’…

John Ball; Pension Scheme CEO Church of England

Jack Jones – Policy Lead TUC

James Chemirmir – Pension Director at Kingfisher

Jacqui Reid – Partner Sackers

So what does CDC mean to you?

Jack

• Members get more

• Income for life without decision

• Security of income for life

• Not a pot

• Relaxed on the trade off to get there. Higher income but not guaranteed

• More like the ‘gold Standard’

• Government want it and providing a universal provider in care

• Communications are key. Straight forward, simple direct. Not the detail under the bonnet

James

The key areas to review and be clear there is understanding

• Risks – Not seen as DB by the back door. Effort needed to get all on the  page

• Structure – Different animal than the post office which dealt with a specific set of issues

• Evidence – In the words of Jerry McGuire… ‘Show me the money’. Modelling of own employee data is essential

• Trust – Who runs it, the Admin, what the comms look like etc

• Momentum – Hard to go first and be a case study of getting it wrong. (Ed…. But the kudos!)

Jacqui

• Excited about the innovation

• Here to stay

• Scheme ready to come online in the next 12 months

• Working with lots of organisations

• Key that Trustee, Employer, supplier are aligned

• Early adoption needs control

  • Where do you spend your complexity budget wisely (Ed. Said they were sages!)

  • How do the assets move.

Discussion on the tPR code not liking the word ‘better’

Jacquie – a risk focus

John – pensions can go down as well as up etc

James – Decisions are paralysing. Knows wealthy financially literate decision maker businesspeople who froze on “pot decisions” from pensions

Jack – Overall it is better … Just say it…

The obvious question

John introduced questions from the audience and kicked off with one from an absentee…

‘Don’t tell Henry Tapper I asked it to the panel!’

Why did you ever think it was so difficult?

John – It is, it is a serious endeavour

Jack – Blank sheet of paper so more straight forwards to design than embed into a current DC and reengineer it

James – So much in current policy for the whole market to be dealing with

Jacqui – CDC submission is hard getting all in place to be fit for purpose and ensure financial stability etc

                (Ed. But once we have schemes through where there is market choice, employers can crack on with confidence!)

---

Is CDC Made simple enough to act on?

Jacqui  – Yes. Confident.

James – I think so yes. Because of the problems we face, we must make it work.

Jack – Absolutely. Provides what people want

Question from the floor about any concern with employers about employer liability in market downturns?

John – It’s in the ‘pressure valve’ of the actuarial balancing reviews

Jacqui – It money purchase legislation

From the floor – No employer has ever been required to top up a DC pot workplace pension

Critical Success Factors?

Jacqui – Scale and quickly aligned on trade offs

James  -Need active schemes on the go to compare and choose from

Jack – A universal provider will move the market

John – Examples of real experience of collectives in action

Oh yes to summarise lets check the poll asked of the 100 or so people that attended before all kicked off. (Ed. Another packed house!)

The consensus of attendees and panel…

CDC provides better outcomes for members