Consultation outcome

Government response to the public consultation on Retirement Collective Pension Schemes

Updated 3 November 2026

Ministerial foreword

People need confidence that their pension savings can provide them with an income throughout retirement. Collective Pensions (CP) are designed to deliver just that, giving savers the confidence of a regular income and protecting them from having to individually manage risks about how long they will live. We have recently legislated to expand CP provision so that more employers can access these schemes, and it’s very welcome to see more employers wanting to engage with the benefits these schemes could offer.

Today, millions of savers are enrolled in defined contribution (DC) schemes and face important choices about how to use their pension savings in retirement. This is why we want to expand access to CP once again, to allow DC savers to access a CP income at retirement through Retirement Collective Pension Schemes (RCPS).   

Access would be achieved through Guided Retirement, a new framework intended to help people turn their pension savings into a regular income throughout later life. As pension schemes develop the next generation of retirement solutions, it is important that they have access to a broad range of options capable of meeting the different needs and preferences of their memberships.

By pooling longevity risk, RCPS can provide an income that is designed to last for life. They are intended to target inflation-adjusted increases, helping members maintain their purchasing power over time. They do not rely on individuals making ongoing investment decisions throughout retirement. And because assets remain invested within a collective fund, members can continue to benefit from long-term investment returns. RCPS therefore have the potential to combine many of the features that pension savers value: a regular income, protection against longevity risk, the prospect of maintaining living standards over time and freedom from the burden of managing investments throughout retirement.

The government consulted on the policy framework for RCPS last year. We received valuable feedback from stakeholders across the pensions industry, which has played an important role in refining our policy approach and informing the decisions set out in this government response.

We have also published a consultation on draft regulations. The draft regulations establish the framework under which RCPS can be authorised, supervised and operated. They are intended to support innovation and market development while ensuring that appropriate protections are in place for members.

We are publishing the draft regulations consultation alongside the consultation on Guided Retirement. This is deliberate. We encourage stakeholders to consider both consultations together and reflect on how each regime can support the other.

The 2010s saw a transformation of workplace pension saving via automatic enrolment. We now have an opportunity to ensure that the retirement phase evolves as well. By broadening CP provision and creating a framework that supports innovation in retirement income design, we can help more people benefit from a pension that provides security, simplicity and support throughout later life.

I look forward to hearing your views.

Torsten Bell
Minister for Pensions

Read Torsten Bell’s biography on GOV.UK

1. Introduction and overview

About the government response

1.1. This document forms the government’s response to the public policy consultation on Retirement Collective Defined Contribution schemes^{[footnote 1]} that was launched on 23 October 2025 and ran for 6 weeks. Throughout this response, we will refer to these arrangements as Retirement Collective Pension Schemes (RCPS). This replaces the term Retirement Collective Defined Contribution schemes used in previous publications. The change is intended to make the terminology clearer and more accessible, particularly for individuals who are not familiar with pensions industry terminology. The change in name does not reflect any change in policy intent or scheme design. The policy consultation sought views on:

• a) policy proposals for the creation of a new type of Collective Money Purchase Scheme (commonly referred to as a Collective Pension (CP) scheme), to be used only by pensioner members – a RCPS

• b) the legislative change we proposed to make which would amend the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (referred to hereafter as “the Preservation of Benefit Regulations 1991”) to permit transfers of money purchase benefits, without consent, to authorised CP schemes (which is already permitted for transfers to Master Trusts)

1.2. This response will only address point a, as a separate government response to point b was published on 3 June 2026 and regulations have been made.^{[footnote 2]}

1.3. This response is also being published alongside:

• the public consultation on the draft regulations for RCPS^{[footnote 3]}
• the DWP public consultation and FCA Discussion Paper on Guided Retirement policy proposals^{[footnote 4]}

1.4. We will refer to both consultations where further views are being sought.

Responses to the consultation

1.5. We received 56 responses to the consultation. Responses came from a broad range of stakeholders, including a majority from pension scheme providers, law firms, representative and membership bodies and professional services firms. A smaller number of the responses came from financial services and investment organisations, advisory, consulting and governance organisations, technology and analytics firms, unions, a consumer group and an academic.

1.6. Before, during and after the public consultation, we also conducted informal engagement with a range of stakeholders, as well as other government departments, the Pensions Regulator (TPR), the Financial Conduct Authority (FCA) and the Financial Reporting Council (FRC).

1.7. This document highlights the key themes raised in response to the consultation questions and the government’s response but is not an exhaustive commentary on every response received.

1.8. This policy applies to Great Britain. It is envisaged Northern Ireland will make corresponding regulations to ensure a common approach across the United Kingdom.

2. Application and authorisation

Question 1: How do you anticipate Retirement CDC investment strategies will need to differ from those of whole-life CDC schemes?

Summary of responses to question 1

2.1. There were 40 responses to this question.

2.2. Respondents generally indicated that RCPS should maintain higher liquidity than Unconnected Multiple Employer Schemes (UMES), alongside more conservative investment strategies than UMES. Several responses suggested there would be some scope for investment in growth assets, although more generally responses pointed to a stronger emphasis on income generating, predictable cashflow assets and more limited exposure to illiquid or private market investments than UMES. A smaller number of responses highlighted the importance of robust governance, stress testing, and ongoing risk monitoring.

2.3. The reasons identified across responses as to why RCPS require higher liquidity and more conservative investment strategies compared to UMES included that they are decumulation-focused arrangements with an immediate and ongoing need to pay pensions, uncertain or ‘lumpy’ inflows of new members joining the scheme, and shorter investment horizons. Responses suggested these features reduce the ability to take more investment risk or hold illiquid assets compared to UMES, and increase the need for stable, predictable cashflows to protect members from volatility and to ensure benefit payment.

Government response to question 1

2.4. We are grateful for the insight into anticipated investment strategies for RCPS provided by respondents and note that investment strategies will likely be different to those used for UMES, for the reasons given in responses.

2.5. As is the case with UMES, we do not believe it would be appropriate for us to specify or dictate the use of particular investment strategies through regulations. Schemes will need to develop viable investment strategies and having an appropriate investment strategy will be central to sound scheme design. The Pensions Regulator (TPR) will be reviewing the soundness of scheme design at authorisation and throughout ongoing supervision.

2.6. Some respondents to question 1 and in response to other questions made suggestions regarding RCPS that would affect how UMES operates or is authorised, requiring changes to the Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (referred to hereafter as “the 2025 Regulations”). The 2025 Regulations came into force on 31st July, and prospective schemes are preparing for or undergoing the application and authorisation process. We will therefore not pursue policy changes at this stage that would require substantial changes to how UMES is intended to operate.

2.7. For example, one respondent suggested allowing a RCPS to operate within the same section as an UMES, with a single fund and no distinction between accumulation members and those transferring in at retirement. While we can see merit in this approach, we do not think now is the right time to enable it. As UMES are not yet operational, and will not be mature when Guided Retirement duties begin to apply, we are concerned that such ‘combination schemes’ could increase volatility and increase cross-subsidisation between different groups of members. Moreover, combination schemes would require changes to the UMES framework, such as the need to enable cohorting in UMES, additional notification requirements, and the triggers for sectionalisation would need to be reviewed. Such legislative change at a time when these prospective or newly authorised schemes are going through authorisation and setting up for operation may not be welcomed more broadly. As the UMES regime needs time to embed and mature, we do not intend to introduce combination schemes at this stage, but we can see a case for enabling such a prospect in a mature UMES and will keep this under review.

Question 2: What do you estimate the establishment and running costs of an R-CDC scheme to be? Please outline one-off and ongoing costs.

Summary of responses to question 2

2.8. There were 30 responses to this question. The majority of respondents suggested that establishment and running costs of RCPS would be significant.

2.9. A small number of respondents provided numbered costs to this question. These responses suggested that establishment costs could range from £1.5 million to £10 million. Ongoing costs were estimated to be in the range of £0.5 million to £3 million per annum. Among respondents that did not provide a specific cost estimate, most expected costs to be substantial, responses indicating in the multi-million-pound range.

2.10. Responses noted a range of costs that would be incurred in establishing and running a RCPS. Establishment costs included: regulatory, legal and actuarial costs, administration costs, investment costs, establishing IT systems, legal advice and the development of member communications. Respondents also highlighted ongoing costs including: governance, actuarial and administration costs (including regulatory reporting), legal and investment advice, member communications, IT systems and medical underwriting. A number of responses mentioned that leveraging existing systems could change costs, improve efficiency the time required for a scheme to become operational.

2.11. Several respondents compared RCPS costs to whole-life CP scheme costs. These responses were varied with some respondents suggesting costs would be similar for both schemes, others suggesting RCPS costs would be higher, and one response suggesting that RCPS costs would be lower.

Government response to question 2

2.12. We are grateful for the insight into anticipated establishment and ongoing running costs of RCPS and agree there is potential for these costs to be significant and could be at a comparable or higher level to those for UMES. Cost efficiencies may emerge where an organisation establishing an RCPS can build on capabilities developed through an existing UMES.

2.13. As per the financial sustainability authorisation criteria, scheme proprietors will need to have sufficient funds to establish and operate RCPS.

Question 3: Should all business plan requirements that would apply to whole-life unconnected multiple employer CDC schemes also apply to R-CDC schemes? What, if anything, should change or be added?

Summary of responses to question 3

2.14. There were 41 responses to this question. The majority of responses agreed that business plan requirements for UMES would also mostly apply to RCPS.

2.15. Several responses suggested changes or additions to business plan requirements to better reflect RCPS. Suggestions included that there should be more stringent liquidity and cash inflow management, reflecting the decumulation-only status of RCPS and irregular payments into the schemes, alongside more explicit approaches to solvency, resilience, and funding planning. Some responses suggested that business plans should clearly set out cohorting logic, actuarial tests, pricing mechanisms and sustainability checks specific to RCPS. A small number of responses made suggestions for the business plan that included clear processes for onboarding new members and turning their pots into pensions, transfers and member communications, stronger governance, risk management and reporting; and due regard for scale, membership, and growth.

2.16. Two responses made suggestions that if RCPS were to be made available to retail customers, they should be subject to the same marketing and governance requirements as other retail products, with business case requirements expanded accordingly.

Government response to question 3

2.17. We are grateful for the suggestions of how business plan requirements for RCPS may need to be adapted.

2.18. We are satisfied that in the main, issues raised in response to this question will already be included in applications for authorisation, whether evidenced directly in the business plan or elsewhere. We are therefore continuing to intend for RCPS regulations on business plans to align with UMES requirements and we will not be proposing substantial changes as part of the draft regulations.

2.19. In response to suggestions that there should be more stringent liquidity and inflow management than UMES, our view is this can be accounted for through systems and processes expectations and could potentially be explored further as part of TPR’s consultation on the updated code.

2.20. In response to suggestions that there should be more explicit solvency, resilience and funding planning requirements in business plans, our view is that the existing framework already addresses these issues. Existing CP regulations require the scheme proprietor to have sufficient financial resources to meet the financial sustainability requirements including establishing and operating the scheme and dealing with triggering events should they arise, for example wind-up of the scheme. In addition, the business strategy should set out how the scheme intends to operate sustainably over the long term, including its approach to managing key risks. This is complemented by requirements to provide a viability assessment supported by appropriate modelling, and by TPR’s scrutiny of the investment strategy as part of the sound scheme design authorisation criterion. Taken together, we consider these requirements provide assurance on the scheme’s resilience without the need for additional business plan requirements.

2.21. In response to suggestions regarding cohorting logic, the actuarial test and pricing mechanisms, we recognise that these will be important aspects of how RCPS will work. We intend to address these matters in draft regulations, including requirements relating to cohorting arrangements and associated governance, and actuarial equivalence, and we will welcome further views through the consultation on those draft regulations, please see chapter 3 of the draft regulations consultation. We therefore do not propose additional business plan requirements in these areas, but are confident that the draft regulations will provide an appropriate framework for RCPS on these matters.

2.22. Similarly, in response to suggestions that that clear onboarding, conversion, transfer, and member communication processes must be mandatory as part of the business plan, we also think these aspects are sufficiently covered outside of business plan requirements by systems and processes in the regulations (for example, schedule 5 of the 2025 Regulations on member records), and with effective communication being a condition of authorisation and continued operation. So whilst not all elements identified by responses are explicitly catered for in the business plan aspects of the regulations, we think they are sufficiently covered nonetheless.

2.23. In response to suggestions that scale, membership and growth planning should be factored-into business plans, we agree with this and consider this is catered for in the existing business plan requirements, particularly the requirement to demonstrate financial sustainability.

2.24. We note that respondents raised the question of whether to enable retail access to RCPS across several consultation questions and we will reflect this in the relevant response summaries. Our overall position on the question of retail access is that we do not intend to enable a retail environment at this current juncture. We intend to proceed with a wholesale market-only approach to the introduction of RCPS, where pension providers, employers, and trustees make the buying decisions to deliver pension products and services at scale, rather than selling directly to individuals. We view expansion of RCPS to a retail market, where individual savers choose pensions, as a potential option for the future but out of our immediate scope. This may be something that could be explored in the future if there is demand.

2.25. Where responses raised potential concerns about the impact of business plan requirements on trustees, our view is that whilst it needs to be agreed by trustees, it is ultimately the responsibility of the scheme proprietor as set out in section 14A of the Pension Schemes Act 2021.

Question 4: What numbers of member onflows, and at what pot size will be needed to achieve stability in Retirement CDC, given there are no ongoing contributions, and what allowances need to be made for members who opt-out of their default pension benefit solution?

Summary of responses to question 4

2.26. There were 39 responses to this question.

2.27. Responses on the number of member onflows were varied. Most responses suggested that RCPS need several thousand members to achieve stable longevity pooling and smoothed returns. However, a number of responses suggested that relatively low membership thresholds, such as a few hundred, would be sufficient. A few responses suggested that longevity pooling does not require a large membership, but volatility management and smoothing does. Some responses emphasised that it is also important to achieve necessary scale to make the scheme financially and commercially viable.

2.28. Several respondents suggested that a minimum pot size will be required. A small number of respondents suggested the minimum pot size should be in the £20,000 - £30,000 range. However, some responses suggested that average pot size within the scheme would need to be higher, around £100,000.

2.29. A number of respondents commented on what allowances needed to be made for members who opt-out of their default pension for planning purposes^{[footnote 5]}. Respondents mentioned that opt-out assumptions must be included in viability, pricing and growth modelling. A small number of respondents said they believe that opt-outs will not be significant, whilst others suggested that it will be difficult to estimate opt-out rates.

2.30. A number of responses raised other issues. These included:

• that there could be a need for extended cooling-off periods
• that opt-outs post-crystallisation create selection risk which must be mitigated in pricing, communication and governance
• that rules will also be needed on whether members can make subsequent transfers into an existing RCPS pension and if so, whether minimum transfer thresholds would apply or could be waived
• that clarity is needed on whether Collective Pension schemes are outside of the scope of section 40 of the Pension Schemes Act 2026, which provides the statutory basis for regulations imposing scale requirements on DC pension schemes – and whether a Master Trust with a RCPS is entirely exempt
• that failing schemes could face mass withdrawal requests
• that government should consider a provider of last resort to provide consumer confidence and safeguard members in the event of scheme failure

Government response to question 4

2.31. We agree that sufficient onflows will be an important consideration in determining the viability and sustainability of an RCPS. However, as the exact amounts will likely vary according to scheme, we are not intending to prescribe minimum onflow levels in draft regulations. Instead, we have designed the authorisation regime so that schemes will need to demonstrate a viable business model in their viability report to obtain authorisation from TPR. Our view is that schemes should also take potential opt-outs into account as part of their calculations.

2.32. In relation to pot sizes, we agree that very small pots will generate correspondingly low benefit payments and will mean that RCPS may not be the most appropriate decumulation option in this instance. However, we do not intend to prescribe a minimum pot size for RCPS in draft regulations. The government has published a consultation on Guided Retirement policy which is seeking views on the minimum viable pot size for providing a regular income in retirement, (please see chapter 3 of that consultation), and we encourage stakeholders to provide further views through the Guided Retirement policy consultation.

2.33. In response to comments on the risk of failing schemes and whether this could lead to mass withdrawal requests. In the event of scheme failure, the triggering event process and continuity option one provides for an orderly wind-up process, with regular communications to beneficiaries and TPR oversight throughout. If TPR felt there was a risk to the generality of members then they are able to impose a Pause Order on the scheme in prescribed circumstances.

2.34. The £25 billion scale requirement set out in Section 40 of the Pension Schemes Act 2026 applies to DC workplace pension providers used for automatic enrolment, requiring their main default arrangement to hold at least £25 billion in assets by 2030. RCPS are outside of the scope of the measures, as the requirement is intended for accumulation-phase auto-enrolment schemes rather than decumulation-only arrangements. For Master Trusts who have a RCPS, the £25 billion requirement will apply to the main default arrangement used for automatic enrolment accumulation.

2.35. In response to suggestions from respondents that members should be able to make subsequent transfers into an RCPS, we intend to permit such transfers. The consultation on the draft regulations sets out the proposed framework in more detail, see chapter 2 of that consultation.

2.36. A provider of last resort is outside the scope of the proposed legislation to introduce RCPS.

Question 5: What do you think the effects of the proposed adaptation to promotion and marketing criteria, including a prohibition on prospective member/member marketing, would be?

Summary of responses to question 5

2.37. There were 38 responses to this question.

2.38. Respondents generally supported extending the existing promotion and marketing framework so that communications aimed at trustees and scheme operators would also be captured by the requirement to be clear and not misleading and subject to appropriate governance and oversight arrangements, recognising that these parties would be responsible for assessing and selecting RCPS arrangements.

2.39. Consultation responses reflected a range of views on the proposed prohibition of direct member marketing. Many emphasised that trustees should be able to share factual information about RCPS with members and highlighted the need for clear guidance on what constitutes marketing versus the provision of factual information. Several respondents noted that a prohibition on DC schemes passing information from a RCPS to members may be impractical in practice, given trustees’ need to provide factual information, the difficulty in distinguishing marketing from communications, and the risk of undermining informed member decision‑making.

2.40. Other concerns expressed by responses included that a prohibition could reduce take-up of RCPS and hinder market development, could make trustees too risk-averse from selecting RCPS and could create an unlevel playing field compared with annuity, flex then fix and drawdown providers.

2.41. Proponents of a prohibition tended to express concerns about the potential for mis-selling and a need for strong consumer protection. Responses also suggested that DC trustees, particularly of Master Trusts, will be better trained and equipped than (prospective) members to interpret and assess the information produced by a RCPS.

Government response to question 5

2.42. We are grateful for the considerations that have been raised regarding a prohibition on prospective member/member marketing.

2.43. We intend to adapt the existing promotion and marketing framework for CP schemes in draft regulations to reflect the RCPS model by extending its application beyond employers to trustees and operators of schemes who will be responsible for selecting retirement solutions under Guided Retirement.

2.44. Following feedback, we will not pursue an explicit prohibition on promotion and marketing to members and prospective members in draft regulations. As RCPS will not operate in a retail environment and access to an RCPS will be through Guided Retirement, we do not consider such a prohibition to be proportionate. This approach also avoids the potential for differences between RCPS and other default pension arrangements that a prohibition on promotion and marketing to individuals in RCPS only could create.

2.45. Concerns were raised that a prohibition on marketing could impact on the provision of factual and educational information about RCPS. As a general principle, we believe that schemes should be designing appropriate member communications from the outset – these will be subject to the conditions of the communication authorisation requirement.

2.46. In response to concerns about how information about an RCPS will be passed to members of a ceding scheme, please see our response to Question 13.

3. Joining a Retirement Collective Pension Scheme

Question 6: How would an approach to allow access to Retirement CDC via a Guided Retirement default or formal partnership between trustees, protect members, and impact a developing market?  Would there be any unintended consequences?

Summary of responses to question 6

3.1. There were 48 responses to this question. Responses broadly agreed that Guided Retirement default pensions could be a suitable pathway to RCPS, with some suggesting that trustee-mediated access protects members. However, some responses caveated this support with the need for robust communications, disclosure, and guidance as part of the Guided Retirement journey. Concerns about irrevocability and the need for additional protections such as cooling-off periods or transfer values (with lengths from a few months to a few years) were raised in response to this question and across other consultation questions. Among the concerns about irrevocability, some respondents highlighted the potential for instances where a RCPS may not be a suitable product for an individual, particularly those with poor health.

3.2. Concerns were also raised about inequitable access for non‑trust‑based savers, increased burdens on trustees, risks of market concentration and distortion, and the potential for a cumbersome or confusing member journey.

3.3. The issue of timing alignment between RCPS and Guided Retirement was a prominent issue raised in response to this question and more broadly across consultation responses. Some respondents suggested that the timings needed to be changed so that RCPS can become operational before Guided Retirement solutions need to be selected and implemented.

Government response to question 6

3.4. Following broad support for this proposal, our intention remains that initially, Guided Retirement will be the only route through which members access RCPS. We recognise that this means not all pension savers will have access to RCPS when they are first introduced, however, this may be mitigated through common adoption by schemes under Guided Retirement. The Guided Retirement consultation proposes that trustees should be required to consider whether RCPS is right for cohorts of their membership as part of their design considerations^{[footnote 6]}. Allowing individual access beyond default pensions raises further issues, which requires further policy development before being taken forward. Our priority is enabling schemes to be established for the implementation of Guided Retirement.

3.5. Members will therefore access RCPS through Guided Retirement. This includes:

• where the RCPS is the designated default pension benefit solution for members of a Master Trust with an RCPS section
• where a member is transferred into an RCPS from another arrangement, including a single-employer trust, another Master Trust, or an FCA-regulated scheme
• where the RCPS is one of multiple default pension benefits solutions but not the designated pension solution made available by trustees/managers and the member actively chooses the RCPS under section 50(3)(c) of the Pension Schemes Act 2026

3.6. As per the above, we want to make clear that it is our intention that individuals in FCA-regulated schemes will have access to RCPS, where members are in a scheme which offers access via Guided Retirement, subject to the development of FCA rules on Guided Retirement. For more information, please refer to our response to consultation Question 7 and see chapter 2 in the RCPS draft regulations consultation document.

3.7. We do not intend to introduce a separate concept of a formal partnership, as any such arrangements would operate through Guided Retirement.

3.8. We acknowledge the timing alignment concerns between RCPS and Guided Retirement implementation that were raised by respondents. Our intention remains to deliver legislation to allow RCPS to be available as a Guided Retirement default pension. On 13 July 2026, an updated Roadmap was published, which better aligned the delivery timelines of these measures, and proposed a limited, conditional extension for schemes intending to develop RCPS as a default pension offering.^{[footnote 7]} Further detail is set out in chapter 7 of the Guided Retirement consultation, where the proposed mechanism for this extension will be open for views.

3.9. Some respondents raised questions relating to the detail behind the design and practicalities of Guided Retirement. This falls outside of the scope of this consultation and further details are included in the Guided Retirement policy consultation, which is currently open for views.

3.10. We acknowledge the feedback that expressed concerns about the irreversibility of RCPS. Proposals for a cooling-off period prior to benefit crystallisation for irrevocable default pensions are being considered as part of the proposed Guided Retirement regime. For more information, please see chapter 3 of the Guided Retirement policy consultation.

3.11. In response to concerns about the limited flexibility arising from the irrevocable nature of RCPS, we have worked closely with HMRC to develop proposals that would introduce some flexibility within the tax framework. As announced at Budget 2026, the government will introduce legislation that will enable individuals who start receiving a pension under a RCPS to convert that pension to a drawdown pension within a set period, if the RCPS chooses to provide that option under their scheme rules. The government is minded to allow a period of up to one year in which a member may convert their RCPS pension to flexi-access drawdown. Further details relating to this proposal are set out in the Autumn Budget 2026^{[footnote 8]} and the Pension Schemes Newsletter 186^{[footnote 9]}.

3.12. In respect of those with poor health, whilst underwriting may be desired to account for health adjustments, it may be that significant health issues are an indicator that an RCPS may not be the most appropriate option for that member. Specific proposals about how such indicators should be accommodated in the design of default pensions is set out in chapter 3 of the Guided Retirement policy consultation. We intend to require schemes to issue appropriate risk warnings that include making it clear that RCPS may not be a suitable option for people with limited life expectancy.

3.13. Where respondents have raised points about member communications, please refer to our response to consultation Question 12. Further detail on the member journey for Guided Retirement is also being consulted on as part of the corresponding policy consultation.

Question 7: What are your views on the risks, benefits and potential protections for members of Financial Conduct Authority (FCA)-regulated pension schemes being transferred to a Retirement CDC to access their pension savings?

Summary of responses to question 7

3.14. There were 47 responses to this question. Responses were generally supportive of people in FCA-regulated schemes having access to RCPS, with some responses indicating that there are the same or similar risks and benefits between TPR and FCA-regulated schemes when transferring to RCPS. Some responses noted that Consumer Duty would need to be followed by firms intending on sending their members to an RCPS and that associated considerations and requirements would need to be met ahead of any access to prevent foreseeable harm, especially in ensuring that communications are clear and not misleading and that both the risks and benefits associated with RCPS are outlined. A small number of those responses suggested that Consumer Duty offered better protection for members, or that differences between the 2 systems poses a risk.

3.15. Responses indicated there could be a role for Independent Governance Committees (IGCs) in mirroring trustee governance and that there is a need for strong disclosure, communication and cooling-off requirements. A smaller number of responses felt that suitability and advice requirements should be required. Some responses indicated that there may be legal and operational issues when transferring from a contract, particularly in respect of consent arrangements and differences in legal ownership of the assets.

3.16. Some responses felt that RCPS should be accessible to retail customers, including Self-Invested Personal Pensions (SIPPs). This was seen as reducing the risk that the self-employed and other marginalised individuals who are arguably less well-supported from a pensions regime perspective would be excluded from the improved outcomes RCPS could offer.

3.17. Two responses suggested that contract-based providers should be enabled to develop RCPS solutions in the future. One of these respondents gave the rationale that if the government only allows for trust-based providers to operate RCPS, contract-based providers could be discouraged from having this product as part of the suite of decumulation options.

Government response to question 7

3.18. We are grateful for responses to this question. We do not intend to place any legislative barriers in our regulations that would prevent people in FCA-regulated schemes from accessing RCPS via Guided Retirement. Section 58 of the Pension Schemes Act 2026 amends the Financial Services and Marketing Act 2000, enabling the FCA to use its general rule-making powers to make Guided Retirement rules to facilitate this. We will continue to work together with the FCA as this develops.

3.19. In response to questions about access for SIPP holders, our policy intent remains that access to RCPS will only be available through Guided Retirement. Accordingly, SIPP members will only be eligible where their SIPP falls within the scope of Guided Retirement under the Guided Retirement provisions in the Financial Services and Markets Act 2000 (inserted by the Pension Schemes Act 2026) and FCA Guided Retirement rules. We will work together with the FCA to develop this thinking further in future. For our full position in respect of retail access, please refer to our response to consultation Question 3.

3.20. In relation to comments raised regarding Consumer Duty, we note that members are already subject to a range of existing protections in the trust-based regime. These include trustees’ fiduciary duty, supported by TPR’s wider regulatory powers, as well as the authorisation and supervisory frameworks in place for Master Trusts and CP schemes. Where responses raised that there may be legal and operational issues when transferring from a contract, this is being considered as part of the wider work on Guided Retirement and transfers between contract and trust-based schemes, which is discussed in the last section of chapter 4 in the Guided Retirement consultation. Views in response to the relevant question in this section of the Guided Retirement consultation are being welcomed.

3.21. Responses suggested that contract-based schemes should be enabled to develop their own RCPS, however this is outside the scope of the Pension Schemes Act 2021, which defines a qualifying scheme as a trust-based occupational pension scheme: s 3 PSA 2021.

3.22: Separately, we note that many Master Trusts are sponsored by providers that also operate FCA-regulated schemes. This common provider may make it relatively straightforward for members to access RCPS within the same organisation.

Question 8: What matters should we consider in developing an actuarial equivalence requirement for transfers into the scheme, and are there other factors to address regarding member entry?

Summary of responses to question 8

3.23. There were 40 responses to this question. Responses were generally supportive of the proposal to use actuarial equivalence for transferring members into a RCPS, with a small minority of responses expressing concerns. These concerns were that actuarial equivalence might not be an intuitive concept for members to understand and that there could be potential scope for inaccuracies when pricing products.

3.24. The most common themes raised by responses were the need to use central estimate assumptions consistently across all new joiners, and that monthly/weekly pricing may be more appropriate than annual pricing. A smaller number of responses raised issues to be considered such as avoiding cross-subsidisation, ensuring fairness, and that adverse selection and gaming needed to be avoided.

3.25. Several responses also pointed towards the need to include underwriting and that RCPS regulations should be flexible enough to allow a range of approaches.

Government response to question 8

3.26. Following the feedback we have received, we will proceed with drafting regulations requiring schemes to transfer pots on an actuarially equivalent basis, that is; that the expected value of the benefits granted is equal to the pot value. This would be akin to the requirement at regulation 40(5) and (6) in the 2025 Regulations.

3.27. In draft regulations we want to make it explicit that this applies to transfers across UMES and RCPS. We are welcoming further views via the consultation on RCPS draft regulations, please refer to chapter 2 of that consultation.

3.28. Where responses have made suggestions regarding the assumptions, methodologies and other practical considerations for actuarial equivalence to be used, our position is that schemes will need to obtain advice from the scheme actuary and that the scheme actuary’s advice in this area must follow relevant Financial Reporting Council (FRC) standards.

3.29. The scheme must undertake an actuarial valuation on at least a yearly basis and it would be typical that the pricing basis would be updated as a result of the valuation. However, there may often be reasons for schemes to review and update pricing more frequently than this if deemed appropriate based on the scheme’s specific circumstances and actuarial advice. We will therefore leave it open for schemes to update pricing more frequently than annually, provided they maintain actuarial equivalence as discussed above.

3.30. Like Collective Pensions legislation to date, we are intending that our draft regulations will remain silent on the use of underwriting. We support the use of underwriting, but we do not intend to prescribe a specific approach and will leave the use of it to scheme discretion, recognising that practices will vary.

3.31. In response to queries raised on whether Defined Benefit (DB) scheme members will be able to transfer into RCPS, our position is that this will not be permissible as there will not be an access route for such transfers and we are not proposing to create one. This is because DB schemes are not relevant schemes under Guided Retirement in the Pension Schemes Act 2026, as they provide non-money purchase benefits. Our policy intent is to offer an additional option for DC savers through Guided Retirement, recognising that DB schemes already provide a regular income that is often inflation-linked, guaranteed, and may include a survivor pension.

Question 9: What mechanisms should be introduced to ensure that quotations are accurate and not misleading?

Summary of responses to question 9

3.32. There were 43 responses to this question and responses suggested a variety of mechanisms that could be used to ensure that quotations are accurate and not misleading. This included the use of central estimate assumptions aligned with the valuation basis or viability report to support fairness, accuracy and comparability. There were also calls for standardised methodologies and templates to promote consistency. Some responses emphasised the importance of clear risk warnings and disclosures, while others suggested that scenario-based and range-based illustrations would help demonstrate uncertainty and potential variability in outcomes. A further theme was the need for appropriate actuarial oversight and robust governance arrangements.

3.33. Several responses commented on guarantees, with some suggesting that regulations should allow for quotations of the starting pension income or conversion terms on both fixed (based on a particular date and guaranteed for a defined period), and variable (subject to changes in financial conditions) terms. Other factors considered important in respect of guarantees were the need for clear communications about the terms of the quotations and that there may still be some limitations that need to be applied to guaranteed quotations.

3.34. A small number of responses also commented on lifestyling in response to this question, and whether there needs to be an additional lifestyling option which is constructed as suited to individuals who are intending to opt for RCPS at retirement. One response raised whether gradual CP purchase should be permitted.

Government response to question 9

3.35. In response to the suggested mechanisms that were included in responses, we are including the use of central estimate assumptions in the draft regulations on quotations. In terms of using standardised methodologies, it is our intent that schemes will be required to follow the FRC’s TAS 310 standards when pricing and when calculating actuarial equivalence. Quotations are distinct from illustrations (discussed further in Question 13) in that they are provided around the point of access setting out specific terms to which prospective member will accept when entering the scheme. The basis on which quotations are calculated would necessarily be scheme-specific.

3.36. Following consultation feedback, we intend to regulate to allow for quotations calculated on both fixed (with a limited guarantee) and variable terms, noting that in both cases, benefit adjustments will not be guaranteed and will be subject to annual adjustment in line with scheme rules and results of actuarial valuations. We welcome further views on our draft regulations that will limit the terms of the guarantees. Please see chapter 4 of the RCPS draft regulations consultation.

3.37. With regard to a suggested need for risk warnings and disclosures, we intend for this to be sufficiently covered at the point of final application for benefit and we are welcoming further comments on our draft regulations in relation to disclosure as part of the RCPS draft regulations consultation. Please see chapter 4 of the RCPS draft regulations consultation.

3.38. In response to comments on lifestyling, our view is that as an investment decision, how the scheme manages risk in the years before retirement is a decision for the trustees of the DC schemes using the RCPS as a default pension. However, as a matter of course will keep the developing market and broader impacts under review.

3.39. In response to suggestions for gradual RCPS purchase, undertaking this before crystallisation of benefits may not work well with Guided Retirement, where the default pension is presented at the point of access. However, we recognise that gradual purchase could reduce timing risk when moving from drawdown to RCPS post-crystallisation as part of a flex-then-RCPS approach to providing pension benefits.

4. Valuations and adjustments

Question 10: What are your comments on a ‘cohorting’ approach to helping well-performing schemes remain affordable for members and are there alternative approaches you would recommend? What should scheme rules on cohorting include? And does the illustrative drafting capture the policy intent and would this drafting work in practice?

Summary of responses to question 10

4.1. There were 40 responses to this question. Responses were broadly supportive of a cohorting approach, typically citing the reasons that it maintains affordability for new joiners, preserves equity between different generations of retirees, and provides fair treatment of well-performing schemes. Many responses highlighted the importance and challenges around having good member communications for this complex process.  A minority of responses expressed reservations, particularly around the level of complexity introduced by cohorting and the associated increase in administrative burden.

4.2. A small number of responses proposed alternatives to cohorting. These included chain‑linking (where prices are adjusted within the year based on experience), and an annual bonus model (with bonuses reflecting positive experience).

4.3. In terms of scheme rules and cohorting, there were mixed responses. Most of the responses to this part of the question favoured a permissive approach, with trustees being free to set their own cohorting terms and determine how much detail on cohorting should be defined in scheme rules. Where responses did suggest rules include provisions on cohorting, these ranged from them including details of triggers for when cohorts must be set up (including the period a cohort should stay open), to more prescriptive approaches compelling poor performing schemes to set up new cohorts if increases fall below a certain level.

4.4. Ten responses also provided technical comments in relation to the illustrative draft regulation. These included concerns around the draft definition of ‘cohort’ and other suggestions around the wording and cross references used.

Government response to question 10

4.5. We are grateful for responses to this question and note the broad support of our proposed approach. We are intending to proceed with enabling RCPS to use cohorting in line with the policy proposals set out in the consultation. We consider that this approach provides the most appropriate balance between fairness and practicality, while remaining compatible with existing benefit adjustment arrangements in legislation compared to the alternative approaches suggested by respondents. The use of cohorting by schemes will be voluntary. We would like to allow schemes a degree of flexibility in setting their own cohorting terms, for example when to open new cohorts. Schemes will be required to have rules on cohorting and they will also have governance processes which will be scrutinised by TPR.

4.6. We are especially grateful for respondents who provided comments on the illustrative draft regulation for cohorting. We have reviewed these comments and have amended the draft regulation. We would welcome further review and feedback on this as part of our consultation on draft regulations. Please see Question 6 in the RCPS draft regulations consultation document.

Question 11: What issues would removal of the upper threshold and allowing the spreading of cuts over the lifetime of the scheme, for schemes using cohorting, create and how might these be mitigated?

Summary of responses to question 11

4.7. There were 31 responses to this question. Almost half of responses indicated support for the removal of the upper threshold and spreading cuts over the lifetime of the scheme. However, this support mainly came with the caveats that this should be optional and not mandated, or that this should only be used where cohorting applies. Though a minority of responses overtly disagreed with the approach, the majority of responses suggested there could be issues that arise if not done properly. For example, responses indicated it could lead to inconsistency between UMES and RCPS which could confuse the market before it has developed, that it could lead to intergenerational unfairness and weakened scheme responsiveness to shocks, and could introduce additional communication challenges and operational burdens.

4.8. The perceived benefits highlighted by respondents were that it avoids large, one-off cuts and that spreading cuts is likely to be more acceptable to members.

4.9. The perceived challenges in addition to those highlighted above were that smoothing could mask underlying volatility and that without clear rules schemes may switch between applying or not applying thresholds in a way that could be opportunistic.

Government response to question 11

4.10. We are grateful for responses to this question and the insight provided. Following consideration of this evidence, our view is that on balance the existing rules on multi-annual reductions, which allow schemes to avoid making one-off large cuts, should apply for RCPS so that we maintain alignment with UMES and avoid arbitrage on this issue. We also want to avoid introducing increased complexity in the system that would arise if only schemes which used cohorting were allowed to spread cuts over the lifetime of the scheme. We will therefore not be pursuing the removal of the upper threshold and allowing the spreading of cuts over the lifetime of the scheme at this time.

5. Other policy considerations

Question 12: Is there any further information that Retirement CDC schemes should be required to provide to new and prospective members?

Summary of responses to question 12

5.1. There were 49 responses to this question. Responses suggested several key pieces of information that should be provided to members and prospective members of RCPS. This included clear warnings about variability and the absence of guarantees, and explanations of adjustments that do not understate the risk of negative outcomes. There were also calls for providing measurable indicators of scheme sustainability and downside risk in communications, as well as clear information on what happens on death.

5.2. Several responses made suggestions that members and prospective members should be provided with information that enables them to understand the workings of a RCPS. Suggestions included information about the basic design features explained in understandable language, the target benefit level and target benefit increases, the actuarial equivalence methodology and why it exists, the cohorting structure and how this is treated and how cuts and adjustments are applied.

Government response to question 12

5.3. We agree that communications about RCPS will be important and we intend to broadly align communication requirements with those for UMES. However, we will make targeted changes where RCPS-specific issues arise, primarily through amendments to the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (referred to hereafter as “the Disclosure Regulations 2013”). These regulations set minimum requirements in respect of prospective member and member communications, and schemes remain free to enhance their communications to cover more detailed aspects if they wish.

5.4. For example, we intend to amend the Disclosure Regulations 2013 to ensure members and prospective members of RCPS receive relevant information, including appropriate risk warnings. These regulations will cover key information suggested by respondents, such as explanations of benefit adjustments and what happens on death. We are also planning to amend the Disclosure Regulations 2013 to make it compulsory for prospective members to receive basic scheme information through a member booklet, providing a clear overview of how the scheme operates. Many responses to the consultation were clear that member understanding of RCPS was greatly important and so ensuring that prospective scheme members have detailed information about the RCPS and its features ahead of joining means that they will be equipped with the relevant information they need.

5.5. In response to feedback on the need to clearly communicate variability and the absence of guarantees, we consider this will be addressed through risk warning provisions in the Disclosure Regulations 2013. From an RCPS perspective we believe the risk warning provisions will require schemes to make clear that benefits are not guaranteed, may fluctuate, and make clear that RCPS may not be suitable for all individuals, including those with limited life expectancy.

5.6. In response to suggestions that cohorting needs to be sufficiently communicated, we intend to amend the Disclosure Regulations 2013 to require schemes to explain what cohorting is where this is used, including how it affects target benefits and how adjustments are applied across members.

5.7. In response to suggestions that benefit adjustments need to be explained, we believe this is already covered by regulation 22A of the Disclosure Regulations 2013.

5.8. Where responses had concerns about RCPS being a new product and there being limited member understanding, regulation 36 of the 2025 Regulations, which we intend to apply to RCPS, requires schemes to demonstrate that they have effective communication processes, including arrangements to assess whether member communications are clear and support member understanding. We also anticipate that wider guidance materials such as those produced by the Money and Pensions Service (MaPS) that are widely accessible to the public will help improve member knowledge. As noted in paragraph 5.3, the Disclosure Regulations 2013 set minimum requirements and schemes should consider what additional communications may help educate prospective members and members about their retirement income.

5.9. We would welcome further views on the changes to the Disclosure Regulations 2013 that we have provided for in our draft consultation on regulations. Please see chapter 4 of the RCPS draft regulations consultation.

5.10. Some of the member journey for prospective members of RCPS will be determined through the development of the broader Guided Retirement member journey. For further information and to express views, please refer to the Guided Retirement policy consultation, see chapter 5.

Question 13: Are there practical or operational challenges in delivering R-CDC communications through DC scheme trustees, and how might these be addressed?

Summary of responses to question 13

5.11. There were 42 responses to this question. Of the responses that commented on who should be providing communications, several agreed that this should be provided by the DC scheme trustees. However, it was also felt that there is still a role for RCPS in terms of responsibility for the quality and content of communications and providing this to the DC scheme in a timely way to be passed on to members.

5.12. Responses identified several potential challenges with the proposed approach, namely insufficient trustee knowledge and understanding, issues caused by the disconnect between schemes and the difficulty of being able to provide individualised and tailored communications for members.

5.13. Responses suggested these challenges could be addressed with support and guidance for trustees, the use of standardised templates, and further clarification on the boundary between promotion and marketing and providing factual information.

Government response to question 13

5.14. We plan to require DC schemes with an RCPS default pension to provide prospective members with certain information about RCPS schemes as part of regulation 19 of the Disclosure Regulations 2013 on first information on accessing benefits, known informally as wake-up communications. In practice, wake-up communications issued by DC schemes will contain generic information about RCPS alongside other decumulation options available to members. We expect further detail to be set out on this through the Guided Retirement member journey and for more information please refer to the Guided Retirement policy consultation, see chapter 5.

5.15. When a member is due to join a RCPS as their default pension, we intend to regulate that prospective members must receive clear, scheme specific information about the RCPS through a member booklet. While RCPS must produce this content, the regulations will remain flexible on how and by whom it is delivered. We expect schemes and their partners to establish effective processes to ensure information is shared clearly and consistently, drawing on existing industry practices.

5.16. Much of the required information for both prospective and existing members is already set out in the Disclosure Regulations 2013, as discussed in relation to consultation question 12, and we would welcome further views via our draft regulations consultation on our proposed amendments to the Disclosure requirements.

5.17. In response to concerns around sufficient trustee knowledge, trustees will have a duty to familiarise themselves with upcoming legislation and a duty to understand the nature of the default pension they have determined is suitable for (cohorts of) their membership as part of their fiduciary duty.

5.18. It is envisaged under Guided Retirement policy that trustees will need to explain why they have chosen default pensions to suit the needs and interests of their members. Please see chapter 6 of the Guided Retirement policy consultation, which sets out further details on governance.

Question 14: What additional costs might a Retirement CDC illustration create, and what considerations should be taken into account to ensure illustrations are realistic, consistent, and not misleading?

Summary of responses to question 14

5.19. There were 38 responses to this question. Responses were divided on whether a RCPS illustration would create additional costs, with a sub-set of responses suggesting that if there are additional costs then these would likely be proportionate and necessary.

5.20. Responses highlighted several issues that need consideration. It was suggested that prescribed or standardised assumptions or templates may be required to ensure consistency and a level playing field, alongside the need for regular review.

5.21. It was also suggested that statutory money purchase illustrations (SMPIs) should reflect the scheme’s default pension benefit solution. It was argued that, to remain realistic and not misleading, illustrations where RCPS are the default pension benefit solution should either incorporate inflation-linked increases or clearly explain any mismatch and its implications, particularly the structural inconsistency between SMPI’s level pension or that the ASTM1/SMPI framework may need to be revisited. Respondents emphasised the importance of being explicit about uncertainty and risks to avoid implying guarantees or creating overconfident expectations. Some questioned whether there could be scope for combined projections.

5.22. Other considerations raised included that too much complexity could reduce engagement or increase misunderstanding.

Government response to question 14

5.23. We are grateful for responses to this question and agree in principle with feedback about the need for a degree of standardisation to ensure consistency and a level playing field in this space.

5.24. However, we do not think it best that requirements for illustrations be delivered through this draft legislation. We note that FRC is responsible for setting the requirements for SMPIs and comments in relation to those illustrations have been passed to the FRC to consider in their maintenance of the Actuarial Standard TM1 (ASTM1). As RCPS are one of several decumulation options, our view is that forming regulations on illustrations should be taken forward through regulations on Guided Retirement; where illustrations on different forms of decumulation can be considered in the round. For further detail on Guided Retirement proposals in respect of illustrations, please see chapter 5 of the Guided Retirement policy consultation. The FRC is considering whether changes are necessary to Actuarial Standard TM1. The FRC is also developing standards for alternative illustrations which may be required for other common forms of decumulation, such as RCPS, following the introduction of Guided Retirement. For further detail, please see the FRC’s call for feedback on the ASTM1^{[footnote 10]} and FRC’s Discussion Paper on alternative illustrations for decumulation.^{[footnote 11]}.

Question 15: What charging structure/what charge levels is your organisation considering levying on members?  If implemented, at what level should a Retirement CDC charge cap be set?

Summary of responses to question 15

5.25. There were 30 responses to this question. Some respondents commented on charging structures, suggesting a basis points or percentage of assets under management model. They also emphasised that charges should be transparent, comparable, and clearly structured, with separate administration and investment components, even if these appear to members as a single “all-in” charge on assets under management.

5.26. Responses were mixed on the introduction of a charge cap, with some noting that other decumulation options do not have one. If a cap were to be introduced, several respondents suggested there could be a case for aligning it with the UMES charge cap for consistency. Some respondents noted that CP schemes, including RCPS are likely to have higher running costs and the reasons most commonly noted for this were the expectation of significant build and establishment costs, greater resource requirements and ongoing actuarial and governance costs.

Government response to question 15

5.27. Following feedback, we have determined that to protect members and maintain consistency with UMES, our intent is to introduce a RCPS charge cap that is set at 0.75% per annum of the collective fund, shared between members (mirroring the same level as UMES and DC schemes). The absence of an established RCPS market to drive cost competition supports the need for a charge cap at present, although its necessity can be kept under review over time.

5.28. We are seeking further views on this proposed cap, as well as on other draft regulations covering charges and associated governance, as part of our consultation on draft regulations. Further details can be found in chapter 5 of the RCPS draft regulations consultation. The policy consultation on Guided Retirement is also seeking views on costs and charges proposals, please see chapter 6 of that consultation.

Question 16: Do you foresee any areas of potential arbitrage, and how should Government and regulators seek to mitigate this?

Summary of responses to question 16

5.29. There were 34 responses to this question, which raised several potential areas of arbitrage. A minority of responses suggested there would not be, or only limited potential for arbitrage.

5.30. Among respondents who provided examples of potential arbitrage, several common themes emerged. These included regulatory differences between TPR and the FCA, including differences in communications and marketing requirements. There were concerns about the fairness of pricing, including approaches to underwriting and whether there would be actuarial oversight. The possibility of timing arbitrage, with members transferring under particularly favourable conditions was raised, as was the lack of retail access when other decumulation options are available. One respondent noted that a charge cap would be at variance to other decumulation products.

Government response to question 16

5.31. Our approach where possible in developing this policy has been to maintain alignment with UMES as a priority.

5.32. In respect of concerns about differences between TPR and the FCA, trust-based and contract-based pension schemes are subject to different legal and regulatory regimes and we recognise that some differences exist across the market as a result. TPR and FCA have separate responsibilities for regulating pensions, however, they continue to work closely in partnership to support good member outcomes for pension savers by putting savers at the heart of what they do. TPR and the FCA published a joint strategy in 2018 which was updated in 2022^{[footnote 12]}.

5.33. In respect of concerns about promotion and marketing, please see our response to Question 5.

5.34. In respect of concerns about fairness of pricing, we intend to require the pricing of transfers into RCPS to be consistent with the principle of actuarial equivalence, in a similar manner to the approach that applies to the accrual of benefits in UMES (see response to Question 8 above). This will mean that the scheme actuary’s advice plays a central role in determining pricing and should help to prevent arbitrage opportunities. Importantly, regulation 40 of the 2025 Regulations, establishes the rules for calculating benefits and requires adjustments to be made by reference to a set annual benefit adjustment date. This helps ensure that benefit changes are assessed and applied regularly and consistently as part of the scheme’s ongoing funding and valuation process.

5.35. In respect of concerns about retail access, we do not currently intend to legislate for a retail market for RCPS at this current juncture. For our full position in respect of retail access, please refer to our response to consultation Question 3.

5.36. In respect of charges, we have proposed the introduction of charge cap in draft regulations, please refer to our response to consultation Question 15 and see chapter 5 of the consultation on draft RCPS regulations.

5.37. Other factors raised by responses have been addressed throughout the rest of this response, and which we have considered in the development of draft regulations.

Question 17: Are there any other matters you wish to raise in relation to the possible extension of the CDC authorisation and supervisory framework to include Retirement CDC schemes?

Summary of responses to question 17

5.38. There were 39 responses to this question, which included a broad range of considerations. The most common topics raised by responses included the alignment of timings with Guided Retirement, concerns about the potential irrevocability and inflexibility of RCPS and the desire for government to enable retail and non-workplace access.

5.39. More broadly, some responses emphasised the need to align RCPS with existing pensions frameworks while maintaining flexibility in design. This included calls for consistency with or the need to amend tax rules, alignment with UMES, and clearer legal and regulatory definitions when it comes to scheme status, trustee responsibilities, wind‑up provisions, and interactions with existing legislation. Four responses also suggested extending access to contract‑based arrangements.

5.40. A small number of responses highlighted concerns about flexibility and innovation. One explicitly described the model as overly prescriptive, while 3 others raised similar concerns about limited flexibility and the risk of stifling innovation. Four responses suggested exploring alternatives such as collective drawdown, annuity market reforms, or enhancements to existing DC schemes rather than relying solely on RCPS.

5.41. Some respondents commented on the design features of RCPS, including whether it led to the potential for cross‑subsidies, inflexible income patterns, and the ability to meet diverse member needs, alongside issues of scale, viability, and wider market impacts. Eight responses talked about the importance of member protection and oversight, calling for strong governance, and clear redress mechanisms. One response called for better public education on retirement options, and another response highlighted the need for careful positioning of RCPS so that it is not seen as a panacean option.

5.42. Additional suggestions in response to this question included integrating RCPS into the value for money framework, monitoring long‑term outcomes over time to check whether they are delivering the intended benefits to members, and managing risks during early implementation in particular when schemes are first being established and tested in practice.

Government response to question 17

5.43. We believe most issues raised in response to this question have been addressed throughout this response.

5.44. Our approach has been to align RCPS with the UMES regime where possible, limiting differences to areas where this is justifiable due to the different nature of RCPS.

5.45. As announced at Budget 2026, legislation under a future Finance Bill will amend the conditions in which an individual may keep their pension age or lump sum protection following a transfer of their pension rights between pension schemes. Other legislative changes will be made to ensure that the benefit payment rules can operate as intended for RCPS and to allow transfers from drawdown funds to RCPS. The proposed changes are as follows:

• the calculation of the maximum pension commencement lump sum (PCLS) in RCPS will be calculated by reference to the money purchase ‘scheme pension purchase price’ - this means that for most RCPS members the maximum PCLS will be, broadly, 25% of the amount the uncrystallised DC pension rights transferred to the RCPS

• the calculation of the maximum annuity protection lump sum death benefit will depend on if it is paid from a whole life CP scheme (single and connected scheme or UMES), or an RCPS

• to enable cohorting to operate as intended, there will be provision to allow for RCPS scheme pensions to be reduced at different rates for different cohorts of members

• all, or part, of a member’s drawdown fund will be allowed to be transferred directly to an RCPS to provide a scheme pension

• members with scheme specific lump sum protection or protection of a pension age below age 55 will not automatically lose that protection if they transfer to an RCPS - protection may continue if a member transfers all their DC pension rights from a pension scheme to an RCPS to enable benefit payment and within 3 months of the transfer the member crystallises all their pension rights under the RCPS

5.46. Further details relating to these proposals are set out in the Autumn Budget 2026^{[footnote 13]} and the Pension Schemes Newsletter 186^{[footnote 14]}.

5.47. Where responses suggested exploring alternatives to RCPS, we recognise that it will form one of several potential pension solutions available to schemes as a Guided Retirement default pension. While RCPS offers a range of potential benefits compared with other solutions, it may not be suitable for all members.

6. Next steps

6.1. Building on the responses to this consultation and our ongoing engagement with industry, we have further developed our policy. We have now published a consultation on draft regulations^{[footnote 15]} and strongly encourage interested stakeholders to engage with this next stage of policy development for RCPS.

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1. Retirement Collective Defined Contribution pension schemes - GOV.UK ↩

2. Government response to the public consultation on draft legislation to amend The Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 - GOV.UK ↩

3. The Pension Schemes (Retirement Collective Money Purchase Schemes) Amendment Regulations 2027 ↩

4. Guided Retirement policy consultation - GOV.UK ↩

5. We are using the term ‘default pension(s)’ throughout our response, which under Guided Retirement means the method of taking pension benefits which is presented to an individual as a pre-selected option when they contact their pension provider to access their DC pension pot. A default pension may be provided within an individual’s existing provider (a default pension benefit solution) or by means of a transfer with consent to another provider (a qualifying pension benefit solution). ↩

6. See Chapter 3 of the Guided Retirement consultation, “Design Considerations”, at Guided Retirement policy consultation - GOV.UK ↩

7. Workplace pensions: an updated roadmap - GOV.UK ↩

8. Budget 2026 document - GOV.UK ↩

9. Pension schemes newsletter 186 — October 2026 - GOV.UK ↩

10. The Financial Reporting Council’s call for feedback on the ASTM1 ↩

11. The Financial Reporting Council’s Discussion Paper on alternative illustrations for decumulation ↩

12. Regulating the pensions and retirement income sector: our joint regulatory strategy ↩

13. Budget 2026 document - GOV.UK ↩

14. Pension schemes newsletter 186 — October 2026 - GOV.UK ↩

15. Retirement Collective Defined Contribution pension schemes - GOV.UK ↩