DWP to set out CDC proposals in 'coming weeks'
The government will proceed with legislation to implement collective defined contribution (CDC) schemes and aims to formally respond to the consultation in a matter of weeks, Guy Opperman has confirmed.
The minister for pensions and financial inclusion's comments come just weeks after the consultation, which explored how to deliver CDC, closed to responses.
Royal Mail's plans to introduce a CDC scheme for its employees after union pressure have revived the defined ambition structure after it was put on hold in 2015.
Speaking at the Trade Union Congress (TUC) Pensions Conference, Guy Opperman said CDC schemes have the potential to get good outcomes for employers and employees when they work together.
He said: "CDC has the potential to open up new avenues for employers and their workforces to develop the best pension arrangements for their individual circumstances.
"The positive and constructive way that the Communication Workers Union (CWU) and Royal Mail have worked [on CDC schemes] is an important lesson to us all about how the best can be achieved."
The DWP also said that East Renfrewshire MP Paul Masterton has now withdrawn a 10-minute rule motion and private member's bill aimed at triggering consideration of the matter in parliament, having received assurances from the minister on the progress of moves towards CDC.
PP has analysed the industry's hopes and concerns for CDC. While CDC has attracted support, there is doubt over whether there would be much demand from employers to introduce CDC given most have already closed down DB and are now heavily committed to DC. There are also concerns about governance and high costs, restrictions to single-employer schemes, and compatibility with Freedom and Choice.
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