A new type of pension scheme, with the potential to
provide better retirement outcomes and stability, will move a step
closer today.
First in the queue to sign up are over 100,000 posties who work
for Royal Mail. The scheme is strongly backed by the posties
union the Communication Workers Union (CWU).
The new, Collective Defined Contribution (CDC) schemes, will
offer savers an income in retirement and also ensure that costs
are predictable for employers.
They work by both employers and employees contributing to a
collective fund, and from this fund individual retirement incomes
are drawn.
Minister for Pensions, , said:
We have seen the positive effect of these schemes in other
countries and it is abundantly clear that when they are
well-designed and well-run they have the potential to provide a
better retirement outcome for members, and can be resilient to
market shocks such as the pandemic.
The new scheme has been made possible following the creation of
the Pension Schemes Act earlier this year.
Launching a consultation on the new workplace pensions tomorrow,
the Department for Work and Pensions is seeking views on the
draft regulations, designed to enable the launch of single or
connected multi-employer CDC schemes, which will also accommodate
the launch of the new scheme that Royal Mail and the
Communication Workers Union aim to deliver.
CDC schemes will be subject to authorisation and a supervision
regime, this will ensure that only schemes that are well run and
built on sound foundations are allowed to operate, and help to
build confidence in this new form of occupational pension
provision.
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CDC authorisation and ongoing supervision will be
administered by the Pensions Regulator who will produce
detailed practical support for schemes through operational
guidance and a Code of Practice.
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Information about the ‘The Occupational Pension Schemes’
consultation
