The Pensions Regulator has launched a consultation on its new code of practice for multi-employer CDC schemes.
This revised code sets out the authorisation criteria for providers who want to run one of these new multi-employer schemes. It also lays down TPR’s expectations of multi-employer CDC schemes, and how it will use its powers to support this new innovation to market.
The consultation on this revised code will run until February 13, and follows the publication of the Government’s legislation for multi-employer CDCs in October.
These regulations are expected to come into force at the end of July 2026, on the same day as TPR’s revised code.
TPR anticipates being able to accept applications from those seeking authorisation to run multi-employer CDC schemes from the beginning of August, with a view to schemes starting to operate in early 2027.
Until recently, CDC legislation only allowed for single employer schemes. This new legislation and revised code will allow third-party propositions who can offer their scheme to multiple unconnected employers to come to market.
TPR says this builds on the existing code for single-employer CDC. However, TPR says there will be new expectation around the companies financially supporting these schemes, the way these schemes are promoted, and the fitness and propriety of key personnel associated with the scheme.
The Government has stated that CDC schemes can provide a potentially higher retirement income than DC schemes. One of the key advantages is that disengaged members do not have to make decisions on how to turn an accumulated savings pot into a regular income when they reach retirement.
Minister for Pensions, Torsten Bell, said: “Collective defined contribution schemes are a hugely important tool for us improving the pensions landscape – giving savers, employers and providers more options as we seek to deliver better retirement.
“This consultation moves us closer to giving more workers access to lower risk, better outcome pensions, helping deliver a higher standard of living in retirement.”
TPR’s chief executive, Nausicaa Delfas, said: “We’re determined to help turn a savings system into a pension system which provides a sustainable income through later life. CDC could play a role in this, and our consultation marks an exciting development in the journey to help make this innovation available to more people.
“It’s important that new models provide security and value, and we welcome views on our consultation to make sure that balance is right.
“I also invite trustees and corporates considering multi-employer CDC to speak with our innovations service as soon as they can, so they are well placed to apply to TPR for authorisation next summer.”
TPR is currently able to authorise single employer schemes and is working with the DWP on the third stage of establishing a CDC market in the UK – retirement only CDC schemes.
