Arboreum Pensions has launched a new multi-employer whole-of-life CDC scheme, which will initially offer workplace pensions to the Timspon and Vestey family-run businesses.
The new CDC will seek authorisation from TPR with a view to becoming operational in 2027.
The new scheme has ben designed to admit multiple, unrelated employers over time through a single arrangement, which will offer employees a target-based income for life.
Arboreum will act as proprietor, with the scheme supported by professional governance, actuarial oversight and long-term investment management.
Arboreum Pensions was founded by Adrian Boulding and Ben Fowler in order to offer CDC pensions. It has worked with actuarial advisors Hymans Robertson and legal advisors CMS to develop its proposition.
Managing director, Boulding was previously a director of policy at Now: Pensions and pensions strategy director at L&G. He has worked for Tisa, the CDC Forum and the Pensions Quality Mark. Fowler, also a managing director, founded Western Pension Solutions, and is a former group head of pensions for the family-owned food business Vestey Holdings.
CDC aims to offer a pension option that sits between DC schemes, where individuals carry most risks, and DB, where employers have to underpin a guaranteed level of pension through retirement. With CDC, members benefit from the collective pooling of investment and longevity risk alongside the target-based income for life. CDC options also reduce the need for members to manage pension savings in retirement and make complex decisions around drawdown options.
Arboreum managing director Adrian Boulding says: “Many businesses are looking for a pension arrangement that reflects their long-term commitment to their people.
“Our CDC scheme has been designed to meet that need, combining professional investment management, collective risk sharing and strong governance within a sustainable multi-employer structure. Its long-term framework is focused on fair and sustainable outcomes for current and future members and gives UK employers a new way to offer a high-quality workplace pension without taking on a DB promise.”
Hymans Robertson partner Paul Waters (pictured) adds:“The launch of Arboreum is an important milestone for the development of CDC pensions in the UK. For many employers, there’s been a gap between what is offered by DB schemes with a certainty of benefits yet uncertain employer cost of DB pensions and the individual responsibility placed on members in DC schemes.
“CDC offers a different approach. It enables members to share risks collectively and benefit from a long-term investment strategy focused on delivering sustainable retirement incomes. This model has the potential to improve member outcomes as well as broaden access to high-quality workplace pension provision.
“It has been a privilege for our team at Hymans Robertson to support Arboreum in developing this proposition. Its focus on strong governance, good member outcomes and bringing CDC to a wider employer market makes is a significant step forward for pension innovation in the UK.”