Pensions - Articles - Key changes needed in CDC regulations for schemes to prosper

 ACA Chair, Patrick Bloomfield, comments: “It is essential that CDC scheme designs incorporating age related accrual rates and age-related contribution rates (in a single section) are clearly allowed under the initial regulations. We expect this sort of design to be particularly popular with potential scheme sponsors

 “The draft requirements are extensive and will need significant resources, expertise, and appetite for CDC - this might deter employers without such resources from setting up a CDC scheme

 “Although "soundness" is a key concept in the assessment of such schemes, there is no definition provided and the proposed structure of assessing soundness requires the actuary to consider legal matters and accuracy of member communication, in addition to actuarial issues”

 The ACA response also suggests that the provisions allowing for post valuation experience be removed – and if they are retained changes are essential.