Open consultation

Retirement Collective Defined Contribution pension schemes

Published 23 October 2025

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About this consultation

Purpose of the consultation

This consultation seeks views on policy proposals for the creation of a new type of Collective Money Purchase Scheme (commonly referred to as a Collective Defined Contribution (CDC) scheme[footnote 1]), which is to be used only by pensioner members – a “Retirement CDC scheme”. These schemes would allow individuals who have saved into Defined Contribution (DC) pensions to transfer their pot at retirement into a collective fund that provides a trustee managed income for life, adjusted annually based on investment performance and scheme sustainability. 

We are also seeking your views on the legislative change we are proposing to make which would amend the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (“Preservation of Benefit Regulations 1991”) to permit transfers of money purchase benefits, without consent, to authorised CDC schemes (which is already permitted for transfers to Master Trusts). To provide context, it has been necessary to refer to the following existing legislation relating to CDC schemes:

  • Part 1 of the Pension Schemes Act 2021[footnote 2] (“the 2021 Act”) 

  • The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022[footnote 3] (“the 2022 Regulations”) 

  • The Draft Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025 (“the 2025 Regulations”) 

  • The Occupational Pension Schemes (Collective Money Purchase Schemes) (Miscellaneous Amendments) Regulations 2025 (“the 2025 Misc. Regulations”)

Who this consultation is aimed at

We would particularly welcome responses from: 

  • pension scheme trustees and managers, particularly those from DC Master Trust schemes

  • those seeking to establish a Retirement CDC scheme

  • those seeking to establish an unconnected multiple-employer CDC scheme (UMES)

  • those running a single or connected employer CDC scheme

  • those operating sector-wide pension schemes

  • employers who sponsor an occupational pension scheme

  • pension scheme service providers, other industry bodies and professionals 

  • pension scheme members

  • groups representing pension scheme members

Scope of consultation

This consultation applies to Great Britain as pensions is a reserved matter for Scotland and Wales.  

Occupational pensions are a devolved matter for Northern Ireland. It is anticipated that Northern Ireland will make corresponding legislation.

Duration of the consultation

The consultation period begins on 23 October and will run for 6 weeks.

How to respond to this consultation

Please send your consultation responses via email to: 

DWP CDC Policy, Team at the shared email address: CAXTONHOUSE.CDCCONSULTATION@DWP.GOV.UK

Government response

We will publish the government response to the policy consultation on GOV.UK.

How we consult

Consultation principles

This consultation is being conducted in line with the revised Cabinet Office consultation principles published in March 2018. These principles give clear guidance to government departments on conducting consultations.

Feedback on the consultation process

We value your feedback on how well we consult.  If you have any comments about the consultation process (as opposed to comments about the issues which are the subject of the consultation), including if you feel that the consultation does not adhere to the values expressed in the consultation principles or that the process could be improved, please address them to:

DWP Consultation Coordinator
Legislative Strategy Team  
4th Floor, Caxton House  
Tothill Street London  
SW1H 9NA 
Email: caxtonhouse.legislation@dwp.gov.uk

Data Protection and Confidentiality

For this consultation, we will publish all responses except for those where the respondent indicates that they are an individual acting in a private capacity (e.g. a member of the public). All responses from organisations and individuals responding in a professional capacity will be published. We will remove email addresses and telephone numbers from these responses, but apart from this we will publish them in full. 

For more information about what we do with personal data, you can read DWP’s Personal Information Charter.

Ministerial foreword

This policy consultation takes the next step in the development of Collective Defined Contribution (CDC) schemes, as we build momentum in this important area of innovation to our pension landscape.  

Phase 1 of CDC development saw us build the framework for single and connected employer CDC schemes, leading to the launch of the UK’s first CDC scheme. Today sees the culmination of phase 2, with the laying of legislation to enable unconnected multiple employer CDC schemes, which could broaden access to CDC pensions for potentially hundreds of thousands more.   

This consultation on retirement CDC schemes marks the start of phase 3 of CDC development. This will open the benefits of CDC membership in retirement to many of the 16 million people in UK currently saving into a DC scheme, offering a wider range of options to those who have spent years building up an individual pension pot. 

The time is ripe to consult on these next steps. The Pension Schemes Bill 2025, which is currently being debated in Parliament, places duties on DC scheme trustees or managers to have in place a default pension plan for their members which are designed to, in most cases, provide a regular income, protection against longevity risk and from complex decision making, something that retirement-only CDC schemes would be able to provide. Our test is to provide pensions in exchange for people’s hard-earned savings – not just pots of savings.

The department has been engaging extensively with a range of industry stakeholders to make this a reality, and I would like to thank all the individuals and organisations that have already provided vital insight and expertise. This engagement is essential to ensuring that retirement CDC schemes will be well-run and sustainable, and I look forward to seeing industry engage fully with this consultation as we continue to put in place the building blocks of a pensions landscape fit for the 21st century.

Torsten Bell, Minister for Pensions.

Chapter 1: Background

1. Collective defined contribution (CDC) pension schemes provide an innovative alternative to traditional defined benefit (DB) and defined contribution (DC) pension schemes. In whole-life CDC schemes, member and employer contributions are pooled in a collective fund from which an aspired-to pension income for life is drawn.  

2. Retirement CDC schemes would differ from their whole-life counterparts as they would see individual DC member pots pooled in a collective fund at retirement, enabling individuals who have saved in DC pensions, to access a lifelong CDC income in retirement.  

3. Through the collectivisation of investment and longevity risk, and by targeting benefit increases rather than providing any guarantee, Retirement CDC schemes should be able to invest in a higher proportion of growth-seeking assets, which in turn is designed to produce higher returns for members. By collectivising investments, CDC schemes should be able to better absorb market shocks, protecting individual members from cuts to their benefits. 

4. Given these potential benefits, it is important to explore Retirement CDCs as an option which could add to the current retirement income landscape, providing an income for life while targeting benefit increases. It is also important to consider the member-borne risks of Retirement CDC, which include benefit cuts and potential inflexibility (depending on how retirement solutions are designed).    

5. This consultation sets out the Government’s policy thinking on the scope for Retirement CDC schemes and how they could operate in practice. It explores the key design features, regulatory considerations, and potential legislative changes to the 2025 Regulations, which were laid before Parliament today. Feedback will inform further thinking on how such provision might be facilitated by trust-based pension providers; further our understanding of the specific regulatory challenges their scheme design might pose; and help us develop ways to mitigate these challenges to ensure that this new scheme type operates effectively and deliver good outcomes for members.

Interaction with Guided Retirement policy

6. Potential providers have expressed interest in offering Retirement CDC, particularly in the context of the forthcoming duties on trustees or managers to provide default pension benefit solutions under the Guided Retirement provisions in the Pension Schemes Bill 2025, which is currently being debated in Parliament. Under these measures, trustees or managers of DC occupational pension schemes will be responsible for designing a pension benefits strategy and selecting default pension benefit solutions for their members. Retirement CDC might be offered as a default pension benefit solution under the member’s own scheme; or members may be transferred into an external scheme to access the Retirement CDC scheme (in this case, Retirement CDC would be a qualifying pension benefit solution).

7. Under clause 50 of this Bill (transferrable members), there are two conditions, one of which must be met, for an occupational pension scheme to transfer members (including to a Retirement CDC) to access a qualifying pension benefit solution. The first condition is that it is not reasonably practicable for the trustees or managers of the scheme to design and make available default pension benefit solutions for the members concerned. The second condition is that the trustees or managers have determined that a qualifying pension benefit solution of a qualifying scheme will provide a better outcome for the members concerned, than a solution that the trustees or managers could themselves design and make available.   

8. Clause 57 of the Bill requires the Financial Conduct Authority (FCA) to make corresponding provision in relation to FCA regulated schemes. A discussion of Retirement CDC as a potential option for members of contract-based, FCA-regulated schemes can be found in Chapter 4.  

9. It is intended there will be ongoing stakeholder engagement on the detail of the Guided Retirement measures in the coming months. The inclusion of Retirement CDC as a default solution will feature in these discussions.

Chapter 2: Qualifying benefits and qualifying schemes

10. We are exploring Retirement CDC schemes as a way to broaden access to CDC benefits. It is vital therefore, that Retirement CDC schemes meet the high bar for authorisation which has been built through the 2021 Act and subsequent sets of regulations.

Qualifying benefits

11. We envisage that the existing definition of “qualifying benefits” in section 2 of the 2021 Act, will be met in respect of Retirement CDC schemes.

Qualifying schemes

12. We intend for Retirement CDC schemes to be a form of unconnected multiple-employer scheme (UMES). We do not believe that there is appetite for a Retirement single or connected employer scheme, and to allow for this eventuality would require further primary legislation. 

13. Retirement CDC would operate under trust. We are not aware that there is appetite for CDC schemes to be operated as contract-based pension schemes.   

14. Retirement CDC schemes will contain pensioner members – there will be no regular or ongoing contributions from members or employers, and no accrual. We will consider how best to define Retirement CDC in legislation to distinguish this new scheme type from UMES. We will also be working with HMRC to ensure that these schemes get the same tax treatment as other occupational pension schemes.

Requirement to create a new Retirement CDC section

15. Retirement CDC schemes will contain pensioner members – there will be no regular or ongoing contributions from members or employers, and no accrual.  We propose that Retirement CDC schemes must be established within occupational pension schemes as a section of a Master Trust or UMES. This ensures that these new schemes will therefore be subject to high levels of scrutiny and indeed will already largely be within TPR supervision. This approach also has the advantage of preventing a large proliferation of schemes as Retirement CDC would be limited to providers of Master Trusts or UMES. These schemes will also be able to draw from the economies of scale and operational expertise of their wider organisations.  

16. Under the Guided Retirement provisions in the Pension Schemes Bill 2025, allowing Retirement CDCs to operate as sections of Master Trusts might more easily allow trustees and managers to design solutions which combine retirement options.  For example, trustees may design a default pension plan which splits between drawdown and CDC benefits, where drawdown is facilitated through the DC Master Trust section, and CDC benefits through the Retirement CDC section of the scheme. There must be appropriate separation of CDC benefits and other benefits within the overall scheme, in accordance with section 3 of the 2021 Act. 

17. Organisations operating an UMES scheme, which would already have the investment and administrative expertise in operating a CDC scheme, may wish to offer a Retirement CDC scheme section, to allow individuals from external DC schemes to access a CDC income in retirement (more about how different DC members will access these schemes is discussed in Chapter 4). We would not anticipate that UMES members would wish to transfer to a Retirement CDC scheme section. However, there may be a tension between the terms offered to new and existing members, for example, where an UMES is targeting lower or higher benefit increases than the Retirement CDC scheme section.  

18. We recognise that an UMES scheme may seek to enter the Retirement CDC market by transferring new members into the existing collective fund, rather than establishing a new section. However, this approach must not be used to bypass the authorisation requirements for Retirement CDC schemes. To prevent this, we will take steps to mitigate such practices. At a minimum, the UMES would be expected to submit a revised business plan to TPR. This would allow TPR to assess whether the scheme should instead be required to apply for authorisation to open a new Retirement CDC section. Entering the market without proper authorisation could create an unfair commercial advantage and lead to excessive cross-subsidisation, which may ultimately result in consumer detriment.

Chapter 3: Application and authorisation

19. Subject to amendment following the coming into force of the 2025 Regulations, the 2021 Act set out the criteria for schemes to meet for TPR authorisation purposes. Organisations seeking to be authorised as CDC schemes must go through a formal application and authorisation process.

Application

20. We therefore propose that Retirement CDC schemes would need to seek authorisation from TPR to operate. The onus will remain on the applicants to provide TPR with the necessary information to obtain authorisation. We also envisage that the current six-month deadline for TPR reaching a decision on an application would apply.  

21. Regulation 6 of the 2025 Regulations inserts new section 9A into the 2021 Act to impose a mandatory deadline on prospective providers who have received authorisation from the Pensions Regulator (TPR) to operate, to commence operating as an unconnected multiple employer CDC scheme. Failure to begin operating as a CDC scheme by the commencement deadline would result in authorisation being automatically withdrawn.  

22. A scheme that is granted authorisation will have 24 months from the date on which TPR receives the application to begin operating or authorisation will be automatically withdrawn, unless TPR is satisfied the trustees have a good reason for needing an extension of up to six weeks. We have taken this approach to deter speculators. We only want people or organisations that are fully committed to providing well-run and soundly designed unconnected multiple employer CDC schemes to apply for authorisation. We intend for the same commencement deadline to apply to Retirement CDC schemes.

Application fee

23. Regulation 7 of the 2022 Regulations sets out the application fee structure for single or connected employer CDC schemes(SCES). This fee structure was replicated for whole-life unconnected multiple employer CDC schemes (see regulation 30 of the 2025 Regulations).  We will be reviewing the application fee structure with input from TPR for all types of CDC schemes to ensure, based on a cost-recovery basis, the application fee amounts remain appropriate.

Authorisation

24. Building and maintaining confidence among industry, trustees and members in Retirement CDC schemes will be essential for ensuring their success and establishing them as a genuine retirement option for members going forward. 

25. To build that confidence, it is essential that only well-designed and well-run schemes can operate. The 2021 Act and the 2022 Regulations set out detailed requirements for authorisation that must be met before a SCES can operate. The authorisation criteria introduced by this legislation was as follows:  

  • the persons involved in the scheme are fit and proper persons

  • the design of the scheme is sound

  • the scheme is financially sustainable

  • the scheme has adequate systems and processes for communicating with members and others

  • the systems and processes used in running the scheme are sufficient to ensure that it is run effectively

  • the scheme has an adequate continuity strategy

26. The 2025 Regulations introduce the following additional criteria for whole-life unconnected multiple employer CDC schemes:  

  • that the scheme has a single scheme proprietor, and the scheme proprietor meets specific requirements; 

  • that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification, and that the scheme has adequate systems and processes for securing that promotion or marketing of the scheme is clear and not misleading; 

  • that the scheme trustees do not promote or market the scheme or act as a chief financial officer for the scheme; and 

  • that (unless required to pursue continuity option 1 by virtue of section 34(3) of the 2021 Act) the trustees of the scheme would not be prevented from pursuing continuity option 3 whenever they consider it appropriate to do so should a triggering event occur in relation to the scheme. 

27. We intend for all the above authorisation to be applicable to Retirement CDC schemes, albeit with modification where necessary. We do not at this stage intend to introduce any new authorisation criteria for Retirement CDC schemes.

Fit and proper persons requirement

Persons subject to scrutiny

28. We want to ensure that TPR assesses the right people in Retirement CDC schemes, both at authorisation and on an ongoing basis. Section 11(2) of the 2021 Act provides a list of the persons to be assessed for single or connected employer schemes.  

29. As Retirement CDC schemes will be commercial vehicles, we also propose to capture the additional persons that would be brought within the scope of the fit and proper test by the 2025 Regulations, so that they are subject to appropriate scrutiny. We have not identified any additional people that TPR would need to assess in a Retirement CDC scheme.

30. Therefore, the list of persons/entities we wish to be included captured for the purposes of authorising a Retirement CDC scheme are:  

  • a person who establishes the scheme

  • a trustee

  • the scheme proprietor

  • a person who promotes or markets the scheme

  • a chief financial officer of the scheme

  • a chief investment officer of the scheme

  • a person who (alone or with others) has power to appoint or remove a trustee

  • a person who (alone or with others) has power to vary the provisions of the scheme

Matters to be considered by The Pensions Regulator

31. Schedule 1 of the 2025 Regulations specifies the matters that TPR must take into account in satisfying itself that the fit and proper persons criteria are met. It is envisaged that these existing requirements will read across in respect of Retirement CDC schemes. However, we would welcome views on whether there are any additional matters that should be taken into account in respect of persons undertaking these functions in a Retirement CDC scheme.

Scheme design

Design flexibility and innovation

32. We have heard that different organisations are exploring a range of potential Retirement CDC scheme designs. These include variations in: 

  • whether and how underwriting is used to reflect individual health or demographic factors

  • the inclusion of death benefits, such as survivor pensions or early death guarantees

  • the option to provide lump sum payments in certain circumstances

  • whether to cohort new members so that they may target at least CPI increases at entry (see Chapter 5)

33. As with the approach taken in the 2025 Regulations, we do not wish to stifle innovation or prescribe a single model. We recognise that different schemes may wish to offer different features to suit their membership and commercial proposition. Our aim is to ensure that the regulatory framework is sufficiently flexible to accommodate a range of designs, while maintaining appropriate safeguards for members.

Valuations and adjustments

34. CDC benefits should be subject to annual valuations and adjustments so that the available assets and the benefits payable remain in balance. This mechanism is central to the CDC model and ensures that schemes remain sustainable over time (see Chapter 5 for further discussion).

Viability requirements

35. The first gateway test for whole-life CDC schemes under the viability requirements should be retained for Retirement CDC to reflect the expectation that CDC benefits should aim to maintain purchasing power over time. Targeting CPI increases can significantly smooth the impact of market shocks and reduce the likelihood of cuts in nominal benefit rates.  

36. We recognise that to some providers it may be attractive to offer ‘level pensions’, to be a CDC alternative to a fixed rate annuity. However, we do not think this is appropriate for CDCs; the annual adjustment means that level pensions could not be achieved, and the high risk of cuts in nominal benefit rates when targeting a level pension compared to a target of CPI, risks undermining confidence in CDCs.   

37. The second gateway and live running tests would not be applicable to Retirement CDC, as there are no ongoing contributions into the scheme. The treatment of members’ payments into the scheme and potential scheme requirements are discussed in Chapter 4, to reflect that transfers should occur on an actuarially equivalent basis.  

38. We would welcome views on any additional tests which may be required.

Design requirements

39. A CDC scheme’s rules must meet prescribed requirements and must also be compliant with the definition of a CDC scheme. It seems sensible that this continues to apply to Retirement CDC.

Pricing

40. A consistent theme from stakeholder engagement has been the importance of ensuring that both new and existing members are protected under the terms on which they are priced when they enter the scheme, to avoid excessive cross-generational subsidisation. This is discussed further in Chapter 4.  

41. Another addition, which was explored for UMES, is allowing schemes to use cohorting – grouping members who join the scheme at the same time into distinct tranches. This would enable new members to enter the scheme on terms that reflect current market conditions and for schemes to price their benefits based on a target of at least CPI-linked increases, rather than inheriting the target benefit adjustment of the entire collective fund. Stakeholders have told us that this approach would make the scheme more predictable and understandable for members and would avoid the risk of new entrants being exposed to legacy performance. We agree that cohorting is likely to be a necessary feature of Retirement CDC scheme design and will explore this further in Chapter 5.

Investment strategies

42. Unlike whole-life CDC schemes, Retirement CDC schemes will be paying out benefits as soon as they start running. As a result, their investment strategies will inherently differ, as greater liquidity will be required from the outset in order to pay out the required benefits. Given sufficient scale, we do not anticipate that this will significantly hinder their ability to invest productively, but we are keen to hear views on this matter.

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

Financial sustainability and scheme proprietor requirement

43. This authorisation criterion aims to ensure CDC schemes have sufficient financial resources and well considered strategies to meet the costs of setting up and running the scheme, as well as costs associated with the occurrence of a triggering event, such as the need to wind up the scheme.

44. TPR will require evidence to enable it to decide whether it is satisfied that a Retirement CDC scheme is financially sustainable, including:

  • the estimated costs of setting up and running the scheme

  • details of the scheme’s sources of income 

  • the scheme proprietor’s strategy for meeting any shortfall between its income and costs including the cost of resolving any triggering event

45. A Retirement CDC scheme will need to have key elements in place before it can begin to operate, such as the design of the pension scheme, trustees, agreements with service providers, and IT infrastructure and administrative systems. These can be expensive and will need to be in place before any members join the pension scheme. It is therefore important that these factors are considered by TPR.

46. Set up and running costs may be higher in some Retirement CDC schemes than in others depending on their structure. And initial costs could also be higher than in whole-life schemes as pensions will be paid for every member from day one. What a scheme is trying to achieve - its objectives - will also be of relevance. This will be particularly key for Retirement CDC schemes as we would be allowing for commercial entities to set-up such schemes and we would want their objectives, and how they are to be achieved, to be clearly communicated to TPR.   

47. If the scheme’s targeted benefits and overall viability is based on assumptions in respect of initial membership and future growth, then we would want TPR to consider the implications of this on its set up and running costs. If the scheme is expected to have 5,000 members within the first year of operation, then it should have sufficient financial resources available to set up and run a scheme of that size.  

48. Similarly, if the scheme’s membership is projected to grow to 10,000 members in its second year, then the scheme should be able to demonstrate to TPR that financial resources sufficient to meet any additional running costs will be in place, when needed. Projected costs may also be based on predicted economies of scale, which will be impacted if the anticipated scale is not achieved.

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.

Scheme proprietor requirements

49. The scheme proprietor of a Retirement CDC scheme would need to satisfy all criteria regarding financing responsibilities and liabilities. When considering whether a Retirement CDC scheme has a single scheme proprietor who meets the criteria, TPR will need to be satisfied that the person identified as the scheme proprietor is responsible for financing the scheme where its administration charges are not enough to cover its costs – see section 14B of the 2021 Act as inserted by regulation 10 of the 2025 Regulations. 

50. They would also be responsible for making business decisions relating to the commercial activities of the scheme and be liable for meeting the costs of any continuity options the scheme pursues. We also intend that when considering an application for authorisation, TPR would consider whether the person identified as the scheme proprietor is liable to provide funds to, or in respect of, the scheme to meet some or all of the costs of setting up the scheme and some or all of the costs of obtaining authorisation of the scheme.  

51. For a Retirement CDC scheme, TPR will need to be satisfied of the existence of a single scheme proprietor and that the scheme proprietor meets the requirements set out in section 14C of the 2021 Act – as inserted by regulation 10 of the 2025 Regulations. In a Retirement CDC scheme we would seek to prohibit the scheme proprietor from also being a trustee of the scheme in order to prevent a clear conflict of interests. We want trustees to focus entirely on the interests of the scheme members and have complete autonomy to do so.

52. TPR would need enough information to be able to assess a scheme proprietor as part of the financial sustainability requirement and that means having access to full accounts, as would be the case for a whole-life unconnected multiple employer CDC scheme.  

53. As is the case for whole-life UMES schemes we want to ensure that any financing required to meet relevant costs is credible and realisable so that it is available at the point of need. Therefore, the scheme proprietor’s ability to deliver such financing will need to be assessed by TPR, both at authorisation and on an ongoing basis.

Business plan

54. We propose that TPR must take into account the scheme’s business plan (the requirements of which are set out in the proposed new section 14A of the 2021 Act as inserted by regulation 10 of the 2025 Regulations). The scheme proprietor would be required to prepare, maintain and submit a business plan to TPR which will include the key financial information for its financial sustainability assessment.  

55. We propose to carry across the requirement in the section 14A of the 2021 Act that any business plan, whether revised or not, must be approved by the scheme trustees before it is submitted to TPR. This is to help ensure co-operation between the scheme proprietor and the trustees, to ensure that the business plan is consistent with other elements of the authorisation criteria and does not undermine member outcomes. 

56. In summary, we propose to carry across the business plan requirements which we would apply to whole-life unconnected multiple employer CDC schemes under the 2025 Regulations. We also need to consider whether there is additional information the scheme proprietor should be required to include in the business plan of a Retirement CDC scheme.

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

Scale and onflows

57. CDC schemes are exempt from the scale requirements contained in the Pension Schemes Bill 2025. It is right that this emerging market can develop with confidence while acknowledging that the benefits of CDC are best released through achieving scale. In whole-life schemes, schemes can develop scale through ongoing contributions from members, and in UMES, by attracting more employers.  

58. Retirement CDC has the potential to be more volatile; as scale is built through members joining the scheme at retirement, there will be no accrual. However, a member joining at retirement is more likely to be transferring a significant sum, and therefore greater scale can be built with fewer members. We anticipate that schemes will be able to demonstrate onflows of members to TPR at authorisation, to demonstrate how they will achieve scale and sustainability.

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?

Promotion and marketing

59. Regulation 10 of the 2025 Regulations (which inserts a new section 14D in the 221 Act) imposes requirements on TPR with a view to mitigating the risk of schemes overpromising to gain a commercial advantage, and to mitigate potential mis-selling of whole-life CDC schemes.   

60.  TPR will be required to take into account specified matters in deciding whether any promotion or marketing of an UMES (including any carried out before the scheme has been authorised) has been unclear or misleading. This would cover any pre-agreements the scheme may have secured prior to authorisation. The authorisation would require that TPR be satisfied: 

  • that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification 

  • that schemes in relation to which there is promotion or marketing must have adequate systems and processes for ensuring that the scheme’s promotion or marketing is clear and not misleading

61.  The 2025 Regulations define the promotion or marketing of a pension scheme as any communication intended to induce an employer to use, or continue to use, the scheme. This definition remains relevant for Retirement CDC schemes, which will actively seek to attract business from other occupational pension schemes, including single-employer trusts. 

62. However, under the Guided Retirement measures in the Pension Schemes Bill 2025, it is trustees and scheme managers—not employers—who will be responsible for selecting default (or qualifying) pension benefit solutions for members. We expect this to be the main route through which members join Retirement CDC schemes. Therefore, we propose that the definition of promotion or marketing in the 2025 Regulations should also apply to communications aimed at trustees and managers of occupational pension schemes, where the purpose is to encourage them to select a Retirement CDC scheme for their members. Working with the FCA as they develop corresponding provision for Guided Retirement, we will consider what further persons or bodies should be captured by the promotion and marketing requirements.

63. Trustees and managers of pension schemes can be expected to carefully scrutinise marketing materials from different schemes to ensure that partnering with a particular scheme would meet the needs and interests of their members. However, we cannot necessarily expect members to have the knowledge or understanding to make the same informed assessment, for example understanding the underlying risks in schemes’ investment strategies. While individuals will retain the ability to opt out of a default pension benefit solution or to select amongst retirement options, we do not intend for there to be a retail market aimed at individuals for Retirement CDC schemes, therefore we propose prohibiting promotion and marketing to prospective and existing members of Retirement CDC schemes. We foresee that there may be necessary exceptions to this proposal, and we welcome views on where this may be appropriate.

64. We are aware that other retirement income products involve a retail market with marketing to individuals. Further consideration needs to be given to what additional powers TPR may need to enable this. Further discussion can be found in Chapter 10.  

65. Retirement CDC schemes may wish to market the scheme to existing members, for example to encourage them to consolidate their other pension pots into the scheme. However, pot consolidation could also be achieved through providing factual information on consolidation options when joining the scheme.  

66. Retirement CDC schemes should not seek to avoid the prohibition by producing marketing materials (or commissioning others to produce such materials) aimed at individuals that are intended to be passed on by partnering DC schemes. Likewise, trustees of DC schemes should not distribute such materials on behalf of the CDC scheme. As with any member communication, trustees must assess whether sharing information aligns with their fiduciary duties.

67. As set out in Chapter 2, we wish to prevent UMES operating as a Retirement CDC scheme without also having to follow all of the same requirements. Differing requirements in relation to promotion and marketing risk giving UMES a competitive advantage over Retirement CDC schemes and we would be interested in hearing views on whether and what restrictions might need to be in place to prevent this.  

68. The 2025 Regulations prohibit trustees from engaging in marketing activity, and this should be carried forward into any future Retirement CDC authorisation framework. However, we expect trustees of Retirement CDC schemes to make use of their challenge function to question any marketing materials produced by the scheme which they think are unclear or misleading. Under section 28 of the 2021 Act, trustees would be required to report such unclear or misleading marketing to TPR as a significant event (see regulation 46(p) of the 2025 Regulations).  

69. New schedule 1C of the 2021 Act, as inserted by regulation 14D of the 2025 Regulations, sets out the matters that TPR must take into account in determining whether it is satisfied that no person has carried out promotion or marketing of the scheme that is unclear or misleading without rectification. We would consider if any changes or additions are needed to ensure such schemes’ promotion or marketing activities are regulated effectively.

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?

Systems and processes to support well-run schemes

70. We want to ensure all CDC schemes have the appropriate systems and processes to enable them to maintain a good standard of administration and governance so that there is adequate security for members’ savings and their data. 

71. Currently, in deciding whether it is satisfied that the systems and processes used in running a CDC scheme are sufficient, TPR must take into account the matters specified in Schedule 5 to the 2022 Regulations if they are a SCES and in respect of UMES, Schedule 5 to the 2025 Regulations. Changes may be required to reflect that there will be no ongoing contributions made in a Retirement CDC scheme.

Continuity strategy

72. This authorisation criterion requires trustees of a CDC scheme to prepare a continuity strategy document as part of the scheme’s application. This document sets out how the interests of the scheme members will be protected if the scheme experiences a triggering event to be amended by regulation 16 of the 2025 Regulations. In the case of a triggering event occurring, trustees are required to pursue one of the continuity strategies set out in section 34 of the 2021 Act, namely to: discharge liabilities and wind up the scheme (continuity option 1); resolve the triggering event (continuity option 2); or convert the scheme to a closed scheme (continuity option 3).  

73.  Regulation 15 of the 2022 Regulations (and reg 38 of the 2025 Regulations) sets out the information that must be included in the continuity strategy for SCES and UMES respectively. This is designed to help TPR determine whether it is satisfied that the strategy is adequate. We envisage that the existing continuity strategy requirements should apply to Retirement CDC schemes. As is the case with systems and processes requirements, it may be necessary to amend the 2025 Regulations for Retirement CDC schemes where references to accrual/ongoing contributions/employers/active members are not applicable.

Administration charges and continuity strategy

74. Section 17(3) of the 2021 Act stipulates that a continuity strategy must contain a section setting out the levels of administration charges that apply to the members of the scheme. This information helps TPR determine whether a CDC scheme would be able to meet the costs of a triggering event, without the trustees increasing or imposing new or increased charges contrary to section 45 of the 2021 Act. 

75. Regulation 16 of the 2022 Regulations (and Regulation 39 of the 2025 Regulations) set out the information about administration charges that must be included in the continuity strategy currently in order for it to be considered adequate. We would not expect this to differ for Retirement CDC schemes.

Ability to pursue continuity option 3

76. It is our policy intention that running a Retirement CDC scheme as a closed scheme (continuity option 3 (see paragraph 71 for continuity options)) should always be an option open to trustees where it is in the best interests of the members, where it is viable to do so and to the extent this is permitted under the legislation.  

77. To be clear, it is not our intention that continuity option 3 should be a default option, necessarily favoured above any other option. At all times, we expect the trustees to take the most suitable course of action, considering the specific circumstances of the triggering event at the time it occurs, and what would be in the best interests of the members. This is intended to mitigate the potential risk of a commercial provider who opts to dispense with their CDC scheme at some future point because they deem it to be unattractive commercially, even though this may not be in the best interests of the members.  

78. We recognise that this approach would not eliminate the risk of wind up and nor is it intended to. Nevertheless, we believe this approach strikes an appropriate balance between commercial interests and the interests of scheme members. It is reasonable to expect Retirement CDC schemes to be designed from the outset to be resilient, so that members can have confidence that their scheme will be around to provide an income over the course of their retirement. It should also be noted that under our proposal a CDC scheme seeking to operate on a closed basis at a future point would need to satisfy the authorisation requirements and seek TPR’s permission to do so.

Chapter 4: Joining a Retirement CDC scheme

79. As set out in Chapter 1, Retirement CDC is being explored in the context of the forthcoming duties on trustees or managers of relevant occupational pension schemes to provide default pension benefit solutions under the Guided Retirement measures in the Pension Schemes Bill 2025, which is currently making its way through Parliament. Retirement CDC schemes would provide members with an income for life at a variable target benefit level, without the need for ongoing management of a pot by an individual.

Access for Defined Contribution members

80. While the creation of Retirement CDC schemes is intended to widen access to CDC benefits, we envision this operating as a wholesale market where the buying decision is undertaken by trustees of schemes in which members have accumulated a pot, and where these trustees deem that a Retirement CDC scheme would be an appropriate retirement option for their members. A benefit of this approach is that trustees are generally better equipped than members to assess and compare the level of investment risk being taken by competing Retirement CDC schemes. Therefore, we intend that access to Retirement CDC schemes be predicated on trustee selection of a specific Retirement CDC scheme. This may be where: 

  1. 1. a Retirement CDC scheme is a default or qualifying pension benefit solution under the Guided Retirement duties in the Pension Schemes Bill 2025, or; 

  2. 2. there is a formal partnership between a DC scheme and the scheme’s chosen Retirement CDC scheme, to cover instances where members are actively engaged, choosing Retirement CDC as their retirement income.

81. These routes to access, alongside the proposed prohibition on marketing to members (see Chapter 3), would prevent the emergence of a retail market aimed at individual members.  

82. Members would be kept informed as to their retirement options through their savings journey and retain the ability to make their own choices.

Transfers to Retirement CDC schemes

83. The two access routes described above would be governed by different legislation with regards to the conditions under which members would be transferred. It is anticipated that regulations will be made under the powers contained in the Guided Retirement provisions in the Pension Schemes Bill 2025. Amongst other things these regulations, following consultation, will prescribe steps be taken in respect of transferring members.  

84. Members who make an active choice about their retirement income would be transferred under the existing legislative framework. They would, subject to satisfying relevant criteria, fall within the provisions of Part 4ZA of the Pension Schemes Act 1993 (statutory right to take cash equivalent). Under the Occupational and Personal Pension Schemes (Conditions for Transfers) Regulations 2021, where trustees are satisfied that the receiving scheme is a collective money purchase scheme authorised by the Pensions Regulator, trustees can make the transfer without further checks.

The role of trustees

85. As trustee boards become increasingly professionalised, they are more likely to possess the expertise and resources needed to evaluate which Retirement CDC scheme would meet the needs and interests of their membership, or indeed whether to offer Retirement CDC as a retirement option at all.  

86. Acting under a fiduciary duty, trustees would only transfer members if they assess that doing so will provide a better outcome for their members in line with the second condition on transferrable members (clause 50(3) of the Pension Schemes Bill 2025)[footnote 4]. For schemes following the first condition[footnote 5] (clause 50(2) of the Pension Schemes Bill 2025) a fiduciary duty would still apply. We propose that access to a Retirement CDC scheme should be contingent on it being either a default solution within the scheme or part of a formal partnership between a DC scheme and a Retirement CDC scheme, which invokes trustees’ fiduciary duty. We welcome views on how best to capture what kind of formal partnership may be appropriate and how to define this.

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?

Financial Conduct Authority (FCA) regulated pension schemes

87. Subject to the Pension Schemes Bill 2025 receiving Royal Assent, the FCA will make corresponding rules under Guided Retirement, to ensure default pension benefit solutions are made available to members of FCA-regulated pension schemes on the same basis as we are providing for members of TPR regulated schemes. We will work with the FCA to understand how transfers to Retirement CDC schemes might work (both as part of Guided Retirement or via a formal partnership) and what member protections may need to be put in place.   

88. Non-workplace pensions operate in a retail environment and are not in scope for Guided Retirement. Therefore, we would also be interested in views on if and how operators of non-workplace pension schemes, including SIPPs which by their nature often involve more individualised decision making, might partner with CDC schemes and how individuals might best be protected if transferring to a Retirement CDC scheme. An advice requirement may not be proportionate.

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

Pricing

89.  With Retirement CDC, the importance of ensuring that both new and existing members are protected under the terms on which they are priced when they enter the scheme, to avoid excessive cross-generational subsidisation, is paramount. If schemes attracted new members by giving them preferential terms, this could negatively impact existing members of the scheme. Over time, this could create volatility and at the most extreme level, the potential for scheme failure.  

90. We therefore think it necessary to introduce a requirement that transfers into the scheme be on an actuarially equivalent basis. That is, that the expected value of rights to benefits provided upon the receipt of a transfer should be equal to the transfer value received. This approach is congruent with the requirement in whole-life schemes for the expected value of accruing benefits to be actuarially equivalent to the contributions paid. Members should also join on terms which are consistent with the valuation for pension increases (unless a scheme is using ‘cohorting’ see Chapter 5).  

91. It may be necessary to extend this new provision to UMES, to cater for pot consolidation into these schemes.  

92. The FRC is developing guidance for actuaries in relation to actuarial equivalence for whole-life schemes, and we anticipate similar guidance being provided by the FRC for Retirement CDC schemes.

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?

93. Cohorting, which would enable schemes to price their benefits based on a target of CPI-linked increases, is discussed in the following chapter.

Quotations

94. Quotations will need to be produced for members approaching retirement. As we do not want Retirement CDC schemes to have direct contact with members of external DC schemes it will be necessary for them to provide information to the DC scheme trustees, whether this is individualised quotations, or a conversion factor that the scheme may use to produce a quotation for their member.    

95. It is important that quotations are produced in good faith and are an accurate reflection of the benefits which members can expect, accepting that the amount they receive may vary due to changing conditions between the quotation date and receipt of benefits (schemes may wish to guarantee the terms of the quote, for a certain period, under their scheme design).  Trustees should also have confidence that they are not being asked to pass on misleading information or not be in effect marketing on behalf of another scheme, as discussed in Chapter 3.  

96. It may be necessary to introduce similar requirements for quotations as is required for the viability report, which would include that quotations:

  • accurately describe the methods by which the scheme determines the rate or amount of benefits provided under the scheme

  •  accurately describe estimates of the rate or amount of any future pension benefits payable under the design of the scheme 

  • accurately explain that the future pension benefits payable under the scheme are subject to annual adjustment in accordance with the scheme rules

97.We may also require quotations to include a list of the key features of the scheme such as that benefits are not guaranteed and that they can be adjusted on an annual basis.

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

Lifestyling

98. Some of the benefits of whole-life CDC schemes come from avoiding lifestyling, (an investment strategy whereby assets are moved into more stable, low-risk and liquid assets as members approach retirement), as whole-life members should transition seamlessly into retirement. With Retirement CDC schemes, this cannot be managed in the same way, as the member will transfer from a DC scheme/scheme section. For the benefits of CDC to be realised for Retirement CDC members, this should be mitigated as far as possible.  

99. This is another reason why it is right that Retirement CDC is explored in the context of Guided Retirement policy. Schemes’ approach to lifestyling might be expected to change depending on the default(s) the scheme has in place. Where a Retirement CDC scheme is a section of a Master Trust, one might expect the approach to lifestyling in the Master Trust to be adapted more easily. We would be interested to hear views on how this could best work where members are being transferred from an external organisation.

Chapter 5: Valuations and adjustments

100.  The valuation and adjustment provisions in CDC legislation are key to schemes’ stability, sustainability and ability to maintain fair treatment between generations of members. These provisions principally provide a mechanism to ensure that a balance is maintained between the value of the collective assets (“available assets”) and the amount needed to pay out the target benefits for all members (“required amount”).  

101. While UMES will be targeting an annual increase which at launch will be at least in line with the expected average annual increase in the level of the CPI, it is inevitable that due to fluctuations in investment performance the funding level will vary over time. As a result, the annual adjustments will also vary. To avoid bias in favour of a particular group of members and to limit the volatility of the benefit adjustments, CDC schemes are required to follow strict rules on benefit adjustments. These requirements include using central estimate assumptions for valuations and ensuring that increases in benefits are sustainable for the remaining lives of the membership – these principles will remain crucial for Retirement CDC schemes.

Cohorting

102. A CDC scheme with historically high investment performance will provide higher expected annual benefit increases than a scheme with historically low performance.  In a scheme where benefit adjustments are the same for all members, these higher increases must be taken into account when determining the initial level of income purchased by the amount transferred to a scheme. Consequently, although members would benefit from higher increases, the initial level of income is likely to be lower than that purchased by a transfer to a scheme with lower increases. This is likely to be felt more acutely in Retirement CDC than in whole-life CDC schemes; as members will not accrue their CDC benefits over a long period, during which time, performance and market conditions will fluctuate, and will instead transfer their whole pot into the scheme at once. 

103. Industry stakeholders have raised concerns that the impact on the initial level of income in a higher performing scheme may make it appear unattractive, and conversely a lower performing scheme more attractive as it will offer a higher initial amount. We therefore wish to consider whether we need to take steps to address this.  

104. We recognised the issue in the consultation on the 2025 Regulations, where we attempted to create a cohorting mechanism whereby members’ benefits could target different annual increases depending on when the benefits accrued. We received feedback that the drafting was unclear and clashed with the requirement at regulation 39(4)(c), that “any such adjustment must be applied to all the members of the scheme without variation”, particularly where some cohorts experience a multi-annual reduction (MAR). As we were not aware that any prospective UMES wanted to use this mechanism, this drafting was therefore not included in the 2025 regulations laid today. Instead, we signalled our intention to continue exploring this further given the potential value such an approach might have in a competitive CDC market. 

105. Retirement CDC schemes would be commercial entities, and the ability of schemes to offer members the opportunity to join the scheme targeting CPI increases (rather than a higher level) may help well-performing schemes to remain affordable and enable them to more easily communicate to members their target benefit upon joining. As such, we include below further detail on how it is envisaged that cohorting might work, and what the impact on members’ adjustments might be, as well as revised illustrative drafting of a regulation in respect to cohorting for retirement CDC schemes.

Further detail

106. In Retirement CDC schemes adopting cohorting, members joining the scheme within a particular timeframe would join on the same terms; their pension would buy a starting level of pension which reflects an aspiration of providing annual adjustments in line with CPI (unless the scheme rules specify a higher level of anticipated annual increases). After a period to be determined by the scheme, a cohort would be closed to new members and a new one opened. These decisions will be informed by market conditions, and the degree to which the scheme assesses that an acceptable level of cross-subsidisation within the cohort has been reached. All cohorts would join the collective fund, but different cohorts would neither benefit nor be at a detriment because of the experience of the collective fund before they joined. Therefore, while all cohorts would join with an aspiration of CPI adjustments initially, over time, different cohorts will have different adjustments due to their historic performance (see figures 1 and 2, columns A and C).  

107. To reflect investment performance and other factors since the members joined in a way which is in line with the principle that benefit adjustments should be applied to all members without variation, the change to the adjustment provided to members in each cohort must be the same (described in column B in the figures below).

For example:

Figure 1. Adjustment: Impact of increases to the adjustment
A B C
Cohort adjustment last year Change to adjustment New adjustment
Cohort A (CPI +0.5% pa) +0.2% pa CPI +0.7% pa
Cohort B (CPI pa) – new joiners to the scheme +0.2% pa CPI +0.2% pa
Figure 2. Adjustment: Impact of decreases to the adjustment where CPI is higher than 0.2%
A B C
Cohort adjustment last year Change to adjustment New adjustment
Cohort A (CPI +0.5% pa) -0.2% pa CPI +0.3% pa
Cohort B (CPI pa) -0.2% pa CPI -0.2% pa

The upper threshold and multi-annual reductions (MARs)

108. The 2025 Regulations include an upper threshold, as described at regulation 40(4)(f), above which increases are provided on a one-off basis rather than being expected to be sustainable over the expected lives of the members. Regulations also specify that benefit cuts are to be implemented over no more than 3 years. The benefit adjustments for cohorts subject to one off increases or cuts will be different to those for cohorts within ‘normal’ ranges: 

  • For the upper threshold, the single increase needs to have equivalent actuarial value to the change which applies to other cohorts over the lifetime of the scheme 

  • Cuts need to have equivalent actuarial value to the change which applies to other cohorts over the lifetime of the scheme. This cut may be spread over a maximum of 3 years. 

This approach ensures there is parity across all cohorts/the entire membership in applying adjustments. The effects on the adjustments of different cohorts are set out in the following figures.

Figure 3. Adjustment: Impact of increases to the adjustment which result in an adjustment above the upper threshold (assumed to be CPI+2%) (applied as at regulation 40(4)(f))
A B C
Cohort adjustment last year Change to adjustment New adjustment
Cohort A (CPI +1.9% pa) +0.2% pa CPI +2% pa plus a one off increase of equivalent actuarial value to 0.1% pa increases which applies to other cohorts over the lifetime of the scheme.
Cohort B (CPI pa) +0.2% pa CPI +0.2% pa
Figure 4. Adjustment: Impact of decreases to the adjustment where CPI is assumed to be 0%pa and the scheme applies benefit cuts via one-off cuts rather than via MARs
A B C
Cohort adjustment last year Change to adjustment New adjustment
Cohort A (CPI +0.5% pa) -0.2% pa CPI +0.3% pa
Cohort B (CPI pa = 0% pa) -0.2% pa CPI -0.2% pa = 0.0% nominal and a one-off cut to benefit of equal value to -0.2% pa which applies to other cohorts over the lifetime of the scheme.

109. We are working with HMRC to ensure that the way benefits are adjusted in Retirement CDC schemes operates with tax legislation.

Illustrative draft regulation

110. Taking on board responses to the consultation on the 2025 regulations, we have developed an illustrative draft regulation, which aims to capture the policy intent set out in this chapter. This drafting aims to reduce confusion by clearly defining the terms used. We welcome comments on this illustrative regulation, which can be found at Annex B.

Other principles for cohorting

111. In line with the first gateway test, cohorts should target at least CPI at their outset. This balances affordability with the expectation that CDC benefits should aim to keep pace with inflation.  

112. We anticipate that different schemes will close/open new cohorts in line with their own assessments of how members should be priced in a given economic context. We think schemes should be able to determine their own terms for the opening/closing of new cohorts, with legislation providing schemes to have rules regarding the review (potentially periodic review) of these arrangements. 

113. We must also consider how benefit adjustments are communicated to members in schemes using cohorting, as over time, different cohorts will have different target benefits. This is further complicated when in any given year, some cohorts may be subject to adjustments higher than the upper threshold or subject to multi-annual reductions, and other cohorts are within a normal range. We would welcome views on how to tackle this issue.

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?

Removing the upper threshold and multi-annual reduction

114. Under the 2025 Regulations, schemes must have rules regarding the threshold provision at regulation 40(4)(f). Trustees may carry out a MAR (multi-annual reduction)but only if scheme rules permit this. Schemes not implementing a MAR must make cuts in a single year. We understand that some stakeholders favour applying all increases/cuts over the lifetime of the scheme instead of applying a MAR. This approach is based on the view that pensioner members may value smoother changes in benefit levels for budgeting purposes, and it would mean that all cohorts have the same arithmetic change to their annual adjustment.    

115. Arguments in favour of retaining these measures include, for the upper threshold; that some pensioner members may wish to feel the benefits of surplus earlier in their retirement.  And for retention of the MAR, applying cuts immediately may improve member satisfaction as the scheme may not have to deliver many years of cuts.  

116. We believe that to limit intergenerational unfairness we should only permit these provisions to be removed in a scheme using cohorting. Allowing this flexibility gives broader options for schemes when deciding which features they value in a Retirement CDC.

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?

Chapter 6: Ongoing supervision framework

117. TPR’s ongoing supervisory role will be vital if the interests of the members of Retirement CDC schemes are to be protected. We propose that the existing ongoing supervision requirements in the 2025 Regulations will also apply to Retirement CDC schemes.

Significant events

118. Section 28 of the 2021 Act provides that where persons specified in s 28(2) become aware that a significant event has occurred in relation to an authorised CDC scheme, they must notify TPR of that fact in writing, as soon as reasonably practicable. The relevant significant events are set out in regulation 3 of the 2022 Regulations and are events that may affect the ability of an authorised CDC scheme to continue to meet the authorisation criteria.  

119. Most of the significant events that would apply to whole-life unconnected multiple employer CDC schemes when the 2025 Regulations come into force are the same as those that apply to single or connected employer CDC schemes. Additional significant events were thought necessary to protect members in the new unconnected multiple employer CDC schemes due to the potential for such schemes to operate on a commercial basis and we subsequently propose that these also apply to Retirement CDC schemes. We would welcome views on what, if any, further significant events are required for a Retirement CDC scheme regulatory regime.

Triggering events

120. Triggering events are events whose nature poses a risk to the future of a scheme and the interests of members. The current triggering events in respect of a CDC scheme are listed at section 31 of the 2021 Act. Regulation 16 of the 2025 Regulations seeks to amend section 31 of the 2021 Act to include additional triggering events applicable to unconnected multiple employer CDC schemes specifically: for example, when an insolvency event occurs in relation to the scheme proprietor (new item 4A triggering event), or when the scheme proprietor decides to end, or does in fact end, the relationship or arrangement with the scheme by virtue of which it is the scheme proprietor (new items 7A & 7B triggering events).

121. As Retirement CDC schemes would operate as sections of a Master Trust or UMES, we propose that a new triggering event could be created, which captures the wind-up of the wider Master Trust or UMES.

122. It is essential that TPR is told that such an event has occurred so it can ensure that appropriate action is taken to address the event and protect members from that point. Obligations to notify specified persons, the information to be included, and the timetable for doing so are set out in regulation 46 of the 2025 Regulations. We are not anticipating any different persons or entities to those identified in relation to an UMES to be involved in Retirement CDC schemes.

123. Furthermore we consider triggering event 10 - Where the scheme is an unconnected multiple employer scheme, the trustees decide that the scheme is at risk of failure and so it is necessary for one of the continuity options to be pursued – is suitably wide to be able to apply to capture such risks in a Retirement CDC scheme. There are currently notification requirements that involve keeping employers notified which of course would not apply in a Retirement CDC scheme. Instead, it may be necessary to inform DC schemes partnering with the Retirement CDC, which would be expecting to transfer their members.

Chapter 7: Continuity options

124. Should the scheme experience a triggering event, trustees are required to pursue of one of the continuity strategies set out in section 34 of the 2021 Act, namely to: discharge liabilities and wind up the scheme (continuity option 1); resolve the triggering event (continuity option 2); or convert the scheme to a closed scheme (continuity option 3).

Continuity option 1 – discharge of liabilities and winding up

125. Section 36 of the 2021 Act provides the framework where the trustees of a CDC scheme are pursuing continuity option 1 following a triggering event. This option will arise where the trustees of the CDC scheme are required by TPR or choose to wind up the scheme.  

126. The requirements of section 36 combined with those in respect of the implementation strategy are intended to protect members by ensuring that the wind-up process takes place within a framework that has been agreed and monitored by TPR. Section 42 of the 2021 Act stipulates that CDC schemes can only be wound up in accordance with continuity option 1.  

127. The framework set out in Schedule 6 to the 2025 Regulations aims to ensure that the value of members’ accrued rights to benefits are transferred to suitable pension schemes or alternative payment arrangements, and that wind up is completed in a timely manner and with minimal disruption to members.

128. The details set out in Schedule 6 cover a number of key areas related to the winding up of an unconnected multiple employer CDC scheme. These include requirements concerning:  

  • the available discharge options including the default discharge option; for example, this might be another CDC scheme; 

  • during the winding up period that no new members may be admitted to the scheme and that no further contributions may be paid into the scheme (other than those due to be paid before the beginning of the winding-up period)

  • the periodic income that must be paid to pensioner members during the winding up period

  • the quantification of the value of each member’s rights

129. We do not anticipate amendment of the discharge options for Retirement CDC schemes. This is another area where it may be beneficial that a Retirement CDC could exist as a section as a Master Trust, as members are unlikely to be left unsupported should the Retirement CDC section be wound up.

130. A power is also given to TPR to direct the trustees to take certain actions, for example, if they consider members’ rights are being put at risk through failure to comply with these regulations. 

131. Schedule 6 also includes requirements regarding the information that the trustees must provide to members and employers, which includes: ensuring that employers and members are kept informed, and members know what their options are; when the value of members’ accrued rights to benefits is expected to have been transferred and to which scheme or alternative payment mechanism. 

132. As there will be no employers in a Retirement CDC scheme, the requirement to provide them with information naturally falls away. However, it may be pertinent to add partnering schemes which would expect to be transferring members at their retirement dates. This is therefore one area we have identified where a change will need to be made to the existing framework to accommodate Retirement CDC schemes.  

133. Similarly, paragraph 7 of Schedule 6 stipulates requirements in relation to the payment of periodic income in the case of a “person who would have become a pensioner beneficiary of the scheme during the winding-up”. In an Retirement scheme no such event could occur as all members of the scheme will be pensioner beneficiaries and so this requirement would not be applicable. Likewise, no contributions could be made in a Retirement CDC scheme, and therefore the stipulation that no further contributions may be made may need to be widened to capture payments into the scheme, given that there would be no contributions, but it’s possible that an existing member could otherwise transfer another pot into the scheme. These changes aside, we propose the same approach to wind-up that is in place for whole-life unconnected multiple employer CDC scheme would apply to Retirement CDC schemes.

Continuity option 2 – resolving a triggering event

134. The aim of continuity option 2 is to allow some flexibility for trustees where the triggering event does not warrant the winding up or closure of the scheme. It provides a framework for ensuring appropriate action is taken whilst ensuring that there is an external check that the triggering event has been properly resolved. This is necessary to protect members.

135. We propose that this option will be available to Retirement CDC schemes for the same reasons.

Continuity option 3 – conversion to closed scheme

136. For reasons explained earlier, we believe that it is right that CDC schemes are robust and sustainable and that members can have some confidence that they will be around to provide an income over the course of their retirement. That a CDC design should aspire to continue as a closed scheme[footnote 6] in certain circumstances rather than wind up does not seem an unreasonable expectation if it can be shown to be in the best interests of members and would show commitment by those providers seeking to operate in this space.

137. Section 38 of the 2021 Act sets out the requirements currently to be followed by trustees and TPR, when a decision is taken to convert the scheme to a closed scheme under continuity option 3 following a triggering event. Continuity option 3 provides a structured framework for securing TPR’s permission to run as a closed scheme. We propose that this option be available to Retirement CDC schemes.

Chapter 8: Other policy considerations

Member communications

Disclosure, publication and member communication requirements

138. Information is communicated to members of whole-life CDC schemes at certain key stages: when approaching retirement; on joining the scheme; and on an annual basis thereafter. These communications explain the collective nature of the scheme, and the key message that CDC benefits are not guaranteed and may fluctuate.

139. For Retirement CDC schemes, we propose taking a broadly analogous approach, though there will be some differences. This is because members will not accumulate in the same scheme, so cannot be assumed to already know what they are entering.

140. The information that new and prospective members should be made aware of includes:

  1. that a Retirement CDC scheme should aim to provide an income for life; 

  2. that there is no guarantee as to the rate or amount of benefit provided under the scheme, and that the rate or amount of benefit may fluctuate; 

  3. the target benefit level of the collective fund, or if cohorting, the target benefit level upon joining; 

  4. a quotation of the starting level of income they might expect upon conversion of their DC pot to CDC benefits (see Chapter 4);  

  5. information on charges; and 

  6. the terms under which the scheme permits transfers out.

141. As prospective members will not accumulate in the Retirement CDC, we propose adding these requirements to the Occupational and Personal Pension Schemes (Disclosure of Information) Regulations 2013 (the Disclosure Regulations 2013), so that relevant DC schemes (where they have a partnership agreement or have identified the Retirement CDC as a qualifying pension benefit solution) can include this information as part of the information required to be given to members at least 4 months prior to their scheduled retirement date.

142. We do not propose making any changes to the publication requirements for CDC schemes, so these will read across to Retirement CDC schemes.

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

Information during accumulation

143. Where the DC and Retirement CDC arrangements are different sections of the same overarching scheme and share trustees, such as in a master trust with a Retirement CDC section, communications to prospective members of the Retirement CDC section can be issued internally by the trustees or managers of the scheme.

144. However, where individuals are transferring from a different DC scheme, it would not be appropriate for them to receive materials directly from a Retirement CDC scheme of which they are not yet members. Instead, communications should be routed through the trustees of the member’s existing DC scheme. Trustees would then review this material under their fiduciary duty and, where appropriate, share it with their members. This approach ensures that individuals receive relevant information about Retirement CDC as a retirement option, enabling them to make an informed decision or be defaulted into the scheme.

145. Under Guided Retirement policy in the Pension Schemes Bill 2025, there are powers to make regulations requiring schemes to issue communications about members’ default(s), which may include Retirement CDC. We believe that the member journey, including the communications members receive about a Retirement CDC scheme, should be consistent (as far as possible) whether they enter the scheme as a default pension benefit solution or by actively engaging with their retirement options. Future regulations dealing with communication requirements would be the subject of consultation.

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

Pension illustrations

146. DC schemes are required to issue annual benefit statements that include a statutory money purchase illustration (SMPI). These are produced using standards set by the Financial Reporting Council (FRC) which sets out the method and assumptions to be used in the calculation, including the form of decumulation, which is currently a flat single life annuity.

147. Some stakeholders have expressed interest in providing pension illustrations to DC members that reflect a Retirement CDC income where Retirement CDC is likely to be the member’s default pension benefit solution. These could support retirement planning and improve member awareness of Retirement CDC benefits. Provision of these illustrations would be voluntary if issued alongside the annual benefit statement containing the SMPI.

148. If Retirement CDC illustrations are provided, we believe that assumptions should be standardised. This would help ensure that illustrations are realistic and do not over-promise potential outcomes for commercial gain. However, we acknowledge that issuing multiple illustrations may risk confusing members and could create additional burdens for DC schemes. We are therefore seeking views on schemes’ appetite to provide additional illustrations alongside the SMPI.

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?

Ongoing communication with pensioner members

149. Ongoing communication with pensioner members, once they join a Retirement CDC scheme and start receiving benefits, will not differ from what is provided by whole-life CDC schemes. Therefore, we do not intend to make any changes in legislation to specify different requirements for Retirement CDC schemes in this respect. Regulations 22 and 22A of the Disclosure Regulations 2013 would apply.

Administration charges

150. We are considering the introduction of a charge cap for Retirement CDC. Whole-life schemes are subject to a charge cap under the Occupational Pension Schemes (Charges and Governance) Regulations 2015, and it is therefore not unreasonable to extend a similar member protection to members of Retirement CDC schemes.

151. As administration charges in CDC schemes are levied uniformly across the fund, competition based on cost is unlikely to manifest in the same way as in the master trust market, for example, where administration charges were driven down by master trust offering preferential rates for larger employers.

152. A charge cap could also provide a safeguard for those who have not actively considered their retirement options under Guided Retirement, but we would also expect trustees to take administration charges into account when designing their pension benefits strategy. The Guided Retirement provisions include a power to cap or prohibit member-borne charges for transfers, which would the subject of a further consultation, subject to Parliamentary process.

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?

Subsisting rights provisions

153. We envisage that the subsisting rights protection (section 67 Pensions Act 1995) which prohibits the conversion of defined benefits into CDC benefits should apply to Retirement CDC, to be consistent with whole-life schemes.

Pension Wise and pensions guidance

154. Unlike members of whole-life CDC schemes, prospective members of Retirement CDC schemes will be transferred at the point of retirement. Currently, under the Stronger Nudge to Pension Guidance Regulations 2022, schemes are required to offer to book a Pension Wise appointment for each member, when they apply to access their DC pension benefits or transferring their savings with the intention of accessing them, unless they opt out.   We will work with the Money and Pensions Service to ensure accurate information about Retirement CDC is provided as part of the Pension Wise appointment and in Money Helper pensions guidance. We will also consider whether any changes should be made to the Stronger Nudge Regulations in light of the Guided Retirement provisions in the Pension Schemes Bill 2025.

Place within the pensions market

155. Retirement CDC schemes would sit alongside other retirement income products and schemes. For members, they may feel like a defined benefit (DB) or annuity, but targeting a benefit level rather than being index linked.  Retirement CDC is also similar to drawdown in that it is open to market shocks which could result in cuts to benefit.   As we have explored, it will be important to communicate the features of such schemes to members at appropriate points.

156. From a regulatory perspective it will also be important to ensure that where providers/schemes are undertaking similar activity, that regulatory arbitrage is mitigated, as we are aware that DB schemes, Retirement CDC schemes and annuity providers will each have to follow different regulatory regimes.

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

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?

Chapter 9: Amendment to the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (“Preservation of Benefit Regulations 1991”)

157. Post-consultation on the 2025 Regulations, stakeholders flagged that bulk transfers without member consent would be an important feature to help UMES schemes build scale. We have therefore been considering the provisions of Regulation 12 of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (“the 1991 Regulations”) which deal with instances where transfers of certain money purchase rights can take place without member consent.

158. Currently Regulation 12(1B) and (7) provides that transfers of relevant money purchase benefits can be made, without consent, to DC master trusts authorised under the Pension Schemes Act 2017. However, as the principle behind this condition is that the receiving scheme has passed a robust authorisation process and remains subject to regulatory supervision on an ongoing basis, we propose that this should also now include CDC schemes authorised under the 2021 Act.

159. We propose amending Regulation 12 on this basis so that transfers of money purchase benefits can be made, without member consent, to schemes authorised under Part 1 of the 2021 Act.

160. Please see an illustrative mark-up of the Preservation of Benefit Regulations 1991, as we propose to amend them, below, along with a draft of the proposed amendment.

Draft Amendment: Amendment of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991

1. In regulation 12(7) of the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 (transfer of member’s accrued rights without consent) [footnote 7] at the end insert “or Part 1 of the Pension Schemes Act 2021 [footnote 8].

Effect of amendment

12.—(1) …

(1B) For the purposes of section 73(2)(b) and (4)(b) of the Act[footnote 9], a scheme may provide for the member’s relevant money purchase rights to be transferred to another occupational pension scheme without the member’s consent where the conditions set out in one of paragraphs (7) to (9) are satisfied.

…

(7) The condition set out in this paragraph is that the receiving scheme is authorised under the Pension Schemes Act 2017 or Part 1 of the Pension Schemes Act 2021.

…

(11) In this regulation—

…

“relevant money purchase rights” are rights to money purchase benefits, where the assets held for the purpose of providing those benefits do not include any guarantee or promise in relation to the amount of the benefits to be provided, or the amount available for the provision of the benefits;

Question 18: Do you have any comments on the proposed amendment to Regulation 12 of the Preservation of Benefit Regulations 1991?

Chapter 10: Next steps

Further legislation

161. Further regulations would be required to enable emerging Retirement CDC schemes to apply for authorisation and the changes proposed to the 1991 Regulations.

Retail market

162. The proposal we have set out in this consultation would enable Retirement CDC schemes to operate in a non-retail market, where authorised Retirement CDC schemes form partnerships with DC schemes, which then transfer their members at retirement (primarily as part of the scheme’s default pension plan). In an open market, schemes would be able to offer a CDC income in exchange for member’s pots in competition with one another, targeting individuals. This has the advantage of opening CDC income in retirement to everyone, including the self-employed.    

163. For the time being, however, we prefer a non-retail market due to the risk of market issues, pricing concerns, and a greater danger of mis-selling (for example by shifting risk and volatility to the member to improve the headline income). We will continue to review the Retirement CDC landscape to evaluate whether this becomes a more appropriate option in future, and at such time, we would consider what additional powers and skills TPR may need.

Universal provider

164. Another potential option is to operate Retirement CDC through a universal provider. This has the advantage of opening CDC income in retirement to everyone, including the self-employed. The universal provider would receive member pots at retirement, invest the collective fund, and pay members a retirement income for life. To avoid market issues, the methods and factors used to price sustainable retirement income could be public, regularly reviewed, and subject to approval by parliament. The collective fund would also be significant, able to invest with a very long horizon and support major infrastructure projects. Nest and the Pension Protection Fund (PPF) are potential organisations with the scale to serve as a universal Retirement CDC provider. 

165.  While a universal provider model for Retirement CDC may offer long-term advantages, it would require significant policy development and time to implement. To ensure alignment as closely as possible with the guided retirement provisions in the Pension Schemes Bill 2025—and to enable Retirement CDC to function as a default pension benefit solution—we consider the model proposed in this consultation to be the more practical option at this stage. However, we will continue to monitor developments in the Retirement CDC landscape and assess whether a universal provider may become more appropriate in the future, either alongside or as a replacement for the current proposed approach.

Annex A: Summary of questions

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

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. 

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

Question 4: What numbers of member onflows, and at what pot sizes 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?   

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

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? 

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

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? 

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

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?  

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? 

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

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

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? 

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? 

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

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? 

Question 18: Do you have any comments on the proposed amendment to Regulation 12 of the Preservation of Benefit Regulations 1991?

Annex B: Illustrative draft Regulation to enable cohorting

To be inserted into regulation 40 of The Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025.

(4A) Subparagraphs (4B) – (4E) apply to a retirement collective money purchase scheme.

(4B) For the purposes of sub-paragraphs (4C)-(4E) –

  1. (f) the adjustment to the rate or amount of benefit provided under the scheme at each benefit adjustment date for each cohort is determined as D percentage, where D is calculated using A, B and C percentages, each determined as follows:

    1. (i) in relation to each cohort, A is–

      1. (aa) the percentage adjustment applicable in accordance with scheme rules in respect of the first benefit adjustment after the cohort joining the scheme;

      2. (bb) the preceding year’s value of D, in respect of the adjustment to the rate or amount of benefit for subsequent years.

    2. (ii) B, where B is the increase or decrease applied to A in accordance with (4C) and (4D);

    3. (iii) C, where C is the total sum of A and B;

    4. (iv) D, which adjusts C in accordance with (4E) and (4F)

(b) “actuarial valuation” has the meaning in section 20(2) Pension Schemes Act 2021;

(c) “cohort” means a group of members as specified in the scheme rules who, in each given year, will receive the same adjustment to the rate or amount of benefit;

(d) “excess” is the amount of B above the upper threshold;

(e) “reduced amount” is the amount of B below 0% nominal;

(f) “upper threshold” is the higher of the amounts referred to in paragraph 4(f)(i) and (ii).

(4C) In all cases -

  1. (a) B must be made in accordance with sub-paragraph (4)(b), where the reference to adjustment in that sub-paragraph is a reference to B;
  2. (b) Where B is an increase, sub-paragraphs 4(e)(i) and,(ii) and 4(f) apply where the reference to adjustment in that sub-paragraph is a reference to D.
  3. (c) Where B is a decrease resulting in C falling below 0% nominal, a one-off reduction representing the equivalent actuarial value to the reduced amount must be made in the year in which D first takes effect unless the scheme rules of a retirement collective money purchase scheme permit the trustees to apply a multi-annual reduction, in which case sub-paragraph 9 applies and the one-off reduction is treated as a multi annual reduction for the purposes of sub-paragraph 9.

(4D) In relation to B, sub-paragraphs (11) – (17) shall apply, as applicable.

(4E) For cohorts where there are no multi-annual adjustments in effect at the date of the valuation:

  1. (a) Where C is above 0% nominal and below the upper threshold, D is set to be equal to C.
  2. (b) Where C is above the upper threshold –
    1. (i) D is set equal to the upper threshold, and
    2. (ii) a one-off increase representing the equivalent actuarial value to the excess must be made in the year in which D first takes effect
  3. (c) Where C is below 0% nominal –
    1. (i) D is set equal to 0% nominal, and
    2. (ii) a one-off reduction representing the equivalent actuarial value to the reduced amount must be made in the year in which D first takes effect.

Annex C: Collective Defined Contribution (CDC) roadmap

1. As set out in this consultation, Retirement CDC is interdependent with other areas of Government policy, including: - the establishment of Unconnected Multiple Employer CDC schemes (UMES), as Retirement CDC could be delivered as a section within an UMES, and, - the implementation of the Guided Retirement provisions in the Pension Schemes Bill 2025, which we anticipate will be the primary route through which members access Retirement CDC.

Unconnected Multiple Employer CDC schemes (UMES)

2. Amendments to The Pensions Regulator’s (TPR) Code of Practice are required to aid (potential) operators of UMES in understanding how to evidence and adhere to the authorisation criteria. Following this process, the 2025 Regulations and updated Code will come into force. Further amendments to the Code may be required in future to enable Retirement CDC schemes.

3. The Institute and Faculty of Actuaries (IFoA) also intends to complete a review of the CDC Practising Certificate regime – a certification scheme for Scheme Actuaries – and to update this if necessary. This specific certification recognises the critical role actuaries play in the effective operation of CDC schemes, and the distinctions between CDC and other types of pension scheme.

Guided Retirement

4. Guided Retirement is expected to be implemented in phases, with Master Trusts producing their pension benefit strategies before other schemes. We recognise the interaction between Guided Retirement and Retirement CDC, which is why we are consulting on Retirement CDC now — to inform policy development ahead of future regulations. Following the outcome of this consultation, our aim would be to have enabling provisions for Retirement CDC schemes in place as close as possible to the point at which schemes begin to comply with their Guided Retirement duties. In any interim period, Retirement CDC could form part of a scheme’s pension benefits strategy as something to pursue as an alternative to the default pension plan for members retiring before Retirement CDC schemes are available.

Roadmap

5. We are setting out an indicative roadmap for delivery, building on the broader workplace pension roadmap published in June. The roadmap below is illustrative and subject to change, depending on the outcome of this consultation, future decisions on government policy and the need for Parliamentary approval of primary or secondary legislation. For example, consultation on Guided Retirement cannot proceed until the Pension Schemes Bill receives Royal Assent and many of the subsequent regulations are subject to the affirmative. Parliamentary process. The roadmap reflects the earliest anticipated timing for each activity.

Figure 1: Retirement Collective Defined Contribution (CDC) roadmap

  1. The Pension Schemes Act 2021 (“the 2021 Act”), provides the legislative framework to establish and operate CDC schemes, but to ensure they sit clearly within the Money Purchase provisions of existing legislation, the 2021 Act refers to them as Collective Money Purchase (CMP) schemes. The terms CDC and CMP are synonymous. ↩

  2. Part 1 of the Pension Schemes Act 2021 ↩

  3. The Occupational Pension Schemes (Collective Money Purchase Schemes) Regulations 2022 ↩

  4. The second condition is that the trustees or managers of the principal scheme have determined that a pension benefit solution of a relevant scheme (other than the principal scheme) will provide a better outcome for concerned members (clause 50(3)). ↩

  5. The first condition is that the trustees or managers have determined that it is not reasonably practicable for them to design and make available to the members concerned default pension benefit solutions. (clause 50(2)). ↩

  6. Closed, in relation to a CDC scheme, means closed to new contributions or new members (or both). ↩

  7. S.I. 1991/167; the relevant amending instrument is S.I. 2018/240 ↩

  8. 2021 c. 1. Part 1 is amended by S.I. [insert ref to The Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations]. ↩

  9. “The Act” is defined in regulation 1(3) as meaning the Pension Schemes Act 1993 (c. 48). ↩

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