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The prospect of fair, sufficient and sustainable pensions; miracle or mirage?
Author Henry Tapper for AgeWage Posted on August 25, 2021 06:05
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In a very short time , Pension PlayPen’s coffee mornings have achieved a regular following of 100 or so pension professionals, keen to hear and share views on critical pension issues.

Steve Goddard has assembled a group of Pension All Stars to discuss matters as various as pension fraud, value for money, consolidation and the state of the state pension. Speakers of the quality of Ros Altmann, Steve Webb and Margaret Snowden have also included IFAs and pension consultants. Steve has a way of bringing people to the table and these events have the feel of the old Pension PlayPen lunches.



The Con and David show

This week’s coffee morning featured Con Keating’s thoughts on the regulation of CDC and the regulator’s thoughts on its timetable for the next six months. At times it threatened to be David Fair’s thoughts on the regulation of Con Keating but David is far too wily to get drawn into a battle over the future of the DB funding code.


While David and Con clearly don’t see eye to eye on DB funding, David surprised me by admitting agreement with Con on most aspects of Con’s thinking on CDC. With the man tasked with drafting the CDC code and guidance for the DWP, participating in the debate, the discussion brought CDC to life.


We learned that the Pension Minister is in contact with master trusts eager to drive forward with CDC as an option. The key question under discussion is whether master trusts can operate CDC for pensioners only or whether CDC needs to be a whole of life solution with members accruing pensions from defined contributions.

Con was clearly of the opinion that it will be much harder to operate on a “transfer in” basis. This is from a note he sent to me after the call


Decumulation only is a tough one. All of the most obvious risk sharing arrangements draw their power from the differences between accumulation and decumulation. It also becomes intensely dependent upon the pricing of the transfer in, a one-off event, not nice at all really.
A scheme moving into one pre-existing with actives and (deferreds) and pensioners is easily doable. I am not saying decumulation only cannot be made to work, just that it is likely to be hard to do sustainably.

From what I heard from David, he seems less concerned with the timing of transfers. He tells me he is looking quite closely at a Canadian plan that takes on multiemployers and also accepts individual members. Clearly CDC is going to be an interesting journey.



The Regulatory timetable.


We learned too about the regulatory timetable and if anyone was taking notes, I will share them on the blog. Sadly, my call was interrupted by external issues which meant I did not properly listen. If the regulator has his notes to hand, I will be happy to publish the detail. I understand the Regulator’s session was recorded and i hope to get the recording linked to this blog in due course.


One thing I did pick up was that a joint consultation on responses to the VFM CP20/9 paper from the FCA in May 2020, will be launched later this year.

Let’s hope we can move at a rather quicker pace this time. It’s good to hear that the DWP, tPR and FCA are working together on this, we need a common definition of value for money, not the current value for money versus value for members confusion.



Con on CDC (round two).


Con’s views on the funding of CDC can be heard again today , at a webinar at 4pm this afternoon. This will be chaired by Michael Mainelli and should be quite something. You can still register by clicking the link in the title.


Collective Defined Contribution (CDC) Pensions: Fair, Sufficient And Sustainable


It is good that Con is getting this platform, his thoughts are genuinely innovative and , in my opinion, he is the first person to articulate the funding principles that need to be in place if CDC is to make a lasting impact on the way pensions are paid in this country.


We have a broken pension system, with defined contribution pots that don’t turn into pensions and defined benefit pensions that too readily turn into pots. We urgently need a third way that provides fairness, sufficiency and sustainability for our pension savings.


Thankfully we have , for the first time in a long time, the prospect of getting it and let’s thank our stars we have people like Con and David, leading the thought process.