Week ending 22 March 2019
CDC seal of approval
The government has announced plans for the first Collective Defined Contribution (CDC) scheme in the UK, following the results of the consultation it launched last November. The responses showed a growing interest in CDC schemes, with the vast majority of respondents supporting the proposals. Royal Mail, backed by the Communication Workers Union, has spearheaded the initiative and its scheme will be the first CDC scheme trialled. However, after delivering this single employer model for Royal Mail, the government has committed to working with the pensions industry to develop CDC models for wider application, in particular decumulation-only vehicles and DC master trusts. The big challenge that has been identified for CDC schemes is how to communicate the variable nature of the benefits to members.
How Regulator was involved in GKN sale
The Pensions Regulator has issued a report which outlines its role in Melrose’s takeover of GKN and explains how it expects to work with the various parties in a takeover or acquisition involving a DB scheme.
Following shareholders’ rejection of a rescue plan last week, Interserve filed for administration and moved all its assets to a new company. However, Interserve has reportedly confirmed that its DB pension schemes will retain a sponsor link with the new company, rather than needing to enter the PPF.
Howden buys in for £230 million
Legal & General has transacted a £230 million buy-in with the Howden Group Pension Plan, covering all 2,000 current and deferred pensioner members of the scheme. The insurer and scheme will now work towards completing a buyout.