Insight
Title:
DB to DC to CDC?
Description:
DC is taking over from DB
- UK FTSE350 still pay more into DB than DC. But that is forecast to change by 2027.
But DC provides a pension pot, not a pension income.
Will CDC fill the gap?
- As of 1 August 2022, providers are able to apply to launch Collective Defined Contribution (CDC) schemes.
- The Royal Mail Collection Pension Plan was the first (and currently only) CDC to receive authorisation from TPR. (Source: Royal Mail CDC scheme gets the nod from TPR – mallowstreet and Source: https://www.ai-cio.com/news/uk-authorizes-first-cdc-pension-plan/ published 11/05/2023)
- TPR published a list of authorised CDCs. There is currently only 1 on the list.
- These pool longevity and mortality risk (like DB) but do not have an employer covenant (like DC).
- TPT have said they are exploring CDC. Source: Why TPT is exploring CDC - More - Pensions Expert published 08/11/2023)