CDC to start in August 2022
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The Department for Work and Pensions has said it plans to lay the final draft regulations for collective defined contribution schemes in parliament in February 2022 and if approved, CDC will come into force on 1 August. The Pensions Regulator will consult on a code of practice next month.
Draft legislation on CDC schemes has been laid that, subject to parliamentary approval, will come into force on 1 August 2022 for CDC schemes by single or connected employers, while “consequential and miscellaneous changes” will be laid in February 2022, the government said in its response to a consultation on draft regulations.
The DWP notes that the regulator “will produce detailed practical support for schemes through operational guidance and a Code of Practice. The Regulator expects to consult on its draft Code of Practice in January 2022."
Engagement on multi-employer CDC has started
While the current regulations are intended for single employer schemes like Royal Mail's, the Pension Schemes Act does give the government powers to make regulations that would enable other forms of CDC, including decumulation-only vehicles, commercial master trusts and industry-based multi-employer schemes.
“I am greatly encouraged by the number of consultation responses which indicated a real desire to extend the benefits of CDC to more employers and their workers,” said pensions minister Guy Opperman said.
“Whilst our prime focus remains on ensuring CDC is available from next year for single or connected employer schemes, we have already begun engagement with interested parties to understand their proposals for multi-employer schemes and explore how CDC can best be used to help deliver good outcomes for more of tomorrow’s pensioners.”
