The Government has today published its response to the consultation on Collective Defined Contribution (CDC) schemes. We welcome its response, which outlines its commitment to bringing forward legislation to enable CDC schemes at the earliest opportunity.
This consultation follows an agreement reached between Royal Mail and the Communication Workers Union (CWU) in February 2018 to pursue a CDC pension. Both parties agreed that a CDC pension would meet our mutual objectives of providing sustainable, affordable and secure future retirement arrangements for all employees.
We believe that the CDC scheme is a fair proposal that compares favourably with the retirement benefits offered in our industry and by other large UK employers. The Government’s response brings us one step closer to making CDC a reality in the UK.
We will update employees on progress as we move towards implementation and will write to them with more scheme details in due course.
Jon Millidge, Chief Risk and Governance Officer, Royal Mail said:
“This is very welcome progress. Royal Mail and CWU have been campaigning together to bring about this legislation, building a cross-party alliance of supporters in both Houses of Parliament as well as working with Government. We now look ahead to the next stage, and ultimately, delivering the UK’s first CDC pension.”
Terry Pullinger, Deputy General Secretary (Postal), Communication Workers Union said:
“The pensions industry desperately needs innovation if we are to enable people to retire with dignity and security. An occupational wage in retirement scheme design running alongside one’s state pension has proven to enable those objectives. DB is the gold standard of that design and should be maintained wherever possible, however where it cannot, there have to be more options than simply DC schemes.
“The CWU is proud, along with Royal Mail, of being at the forefront of such innovation and will be delighted to prove that CDC options will prove to be a watershed moment in pension provision and benefit working people way beyond our own membership.”