Pensions Minister Guy Opperman this autumn promised a formal consultation on Collective Defined Contribution (CDC), and so it has come to pass with an announcement in the House of Commons. The DWP-led consultation paper has been published online and runs until 16 January 2019. It sets out the Government's vision for this new form of occupational pension scheme: policy intention then rather than draft legislation.

This does not herald an alteration of

the categorisation of existing schemes; rather it will allow new schemes "designed for members" to pool investment and longevity risk in providing a pension in retirement.

Within a CDC scheme, a member's contributions are invested in a collective fund with the pension being calculated as follows:

• estimating how much money is needed to provide the target level

of benefits to each member;

• adding up the values for each member to determine the total assets available to provide target benefits to all members;

• if the assets available are higher or lower than the estimated money required to meet target benefits, make corresponding adjustments to: (i) the current payment of . . .

11 Nov 2018   Check other news items