Multi-employer CDC regs to be laid in autumn
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Regulations for multi-employer collective defined contribution schemes will be laid in autumn, the pensions minister has said. An updated CDC code is not expected before July 2026.
The government plans to introduce multi-employer CDC legislation in autumn 2025, and subject to parliamentary approval, aims to bring the legislation and an updated Pensions Regulator’s Code into force “as soon as practicable”.
The government plans to introduce multi-employer CDC legislation in autumn 2025, and subject to parliamentary approval, aims to bring the legislation and an updated Pensions Regulator’s Code into force “as soon as practicable”.
The Pensions Regulator is supporting the Department for Work and Pensions in drafting the regulations on which the DWP consulted last year. TPR plans to engage on CDC between October and December, and to lay the code after July 2026, according to the Financial Conduct Authority’s recently updated Regulatory Initiatives Grid.
Making sure more employers and savers have the option of a CDC pension scheme is an important part of ensuring savings work as hard as possible for people, Torsten Bell said speaking at the LCP Conference on Tuesday.
“Too often at present we are leaving individuals to face significant risks, about how their individual investments perform and how long their retirements last. Pooling some of those risks will drive higher incomes for pensioners and greater investments in productive assets across the economy,” he argued.
Bell also confirmed he wants to deliver decumulation-only CDC, giving access to retirees with DC pots. The DWP said it will continue to work with industry to develop decumulation CDC.
The government views CDC schemes – which require scale – as a potential source of investment in the UK economy, saying "similar collective funds in Canada and Australia [have] proved an efficient way of supporting economic growth, investing in a wider range of sectors and assets".
The government views CDC schemes – which require scale – as a potential source of investment in the UK economy, saying "similar collective funds in Canada and Australia [have] proved an efficient way of supporting economic growth, investing in a wider range of sectors and assets".
TPR’s work, and DWP legislation on CDC, are timed later than several other initiatives, such as the new value for money framework and legislation for defined benefit superfunds, both expected in the pension schemes bill this summer. TPR will start work on a superfund code in early 2026.
CDC schemes pool both investment and longevity risk, providing a target benefit without guarantee, with proponents claiming CDC can achieve higher investment returns than pure DC. CDC is permitted for single-employer, whole-of-life schemes but so far only Royal Mail – which lobbied and worked on the creation of CDC together with the Communication Workers Union – has set up such a scheme for its workforce. It is thought that offering multi-employer versions, and a decumulation-only product, will attract further employers and individuals. A CDC scheme must be authorised by TPR to operate.
CDC schemes pool both investment and longevity risk, providing a target benefit without guarantee, with proponents claiming CDC can achieve higher investment returns than pure DC. CDC is permitted for single-employer, whole-of-life schemes but so far only Royal Mail – which lobbied and worked on the creation of CDC together with the Communication Workers Union – has set up such a scheme for its workforce. It is thought that offering multi-employer versions, and a decumulation-only product, will attract further employers and individuals. A CDC scheme must be authorised by TPR to operate.
