The timetable for multi-employer CDC Pensions
Legislation passed by Parliament
15th December 2025
Regulator’s Code coming into force
31st July 2026
First schemes receive authorisation
Late 2026
First members join workplace CDC pensions
Mid 2027
Five million workers projected to be in CDC
End 2030
Protection As you would expect for a scheme that draws multiple employers together, the new code sets out how the financial interests of each employer, and their staff, will be protected. While it is good to generate economies of scale and moderate the effect of random issues, such as who dies early and who lives a long time, it is crucial we avoid one employer subsidising another employer’s pension costs. And we definitely do not want one group Fortunately, today’s actuaries have a wealth of data about the differences between industries and locations. They can fine tune the terms for each employer and deliver fairness for all. Moreover, the code will require them to account for how they do this. Lastly, the code contains measures to ensure the financial strength and resilience of all schemes that achieve “authorised” status. They must have adequate working capital, a detailed and believable business plan and contingency provisions that will be of members suffering because another group, with different characteristics, is joining up.
resilient in the face of headwinds. All a bit like running a successful family business! If you, or perhaps your children, are devotees of the Pirates of the Caribbean films, then maybe you recall Captain Barbossa rebuking Miss Turner with “the code is more of what you’d call guidelines than actual rules.” We have a similar situation in pensions. In writing the code, the Regulator distinguishes between what is enshrined in law by using the word “must” and what, in their opinion, is good practice by using the word “should”. I am confident that they will be flexible enough to allow a good spectrum of CDC schemes to emerge, each with their own distinctive offering.
multi-employer CDC pension. Extensive checks will be made on anyone wishing to run a CDC scheme – checks grounded in the watchwords of honesty, integrity and financial soundness. Do not even think of applying if you have a criminal record or have been bankrupt, or have run a previous business into the ground and then hid from creditors behind the veil of limited liability incorporation! Applicants will need to demonstrate that they have a track record of running an organisation responsibly, and that they exude the sort of qualities that make them suitable to be in charge of the retirement savings of whole workforces. They will be expected to have professional qualifications, together with a sound knowledge and understanding of pensions. Having said that, the new code is not there to maintain “jobs for the boys” by preserving a closed shop for those already running pension schemes. New entrants will be welcomed into a structure that allows for entrepreneurial thinking that challenges those who may have their feet stuck in the mud of the past.
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