DWP Consultation (The Occupational Pension Schemes (Collective Money Purchase Schemes)

Commenting on the DWP Consultation (The Occupational Pension Schemes (Collective Money Purchase Schemes) (Extension to Unconnected Multiple Employer Schemes and Miscellaneous Provisions) Regulations 2025) Paul Waters, Head of DC Markets, Hymans Robertson, says:

“It is great to see the Multi-Employer CDC Regulations announced today, following the launch of the Royal Mail scheme yesterday. Multi-employer CDC will be critical for the growth and accessibility of CDC to savers across the UK. Today’s announcement is a great step forward in its development and showcases the commitment of the new Labour government by pressing ahead with this initiative.

“The regulations open the door to two main areas. Firstly, to enable industry-based CDC schemes in sectors with lots of employees working for a number of different employers (transport, energy, retail etc). Secondly, it will encourage the development of CDC by commercial providers, serving schemes of all size and shape, in the same way as the DC market currently operates.

“The focus on mechanisms to manage intergenerational risk sharing effectively is an important one for the long-term success of CDC. We should learn from the lessons of Holland and ensure future generations of members feel fairly treated relative to those who went before. Our research has showed that there can be significant intergenerational value transfers, and this should be managed carefully through the scheme design.

“There are many benefits for pension scheme member from today’s announcement. Multi-employer CDC can provide up to 50% higher pensions and a secure income for life, two things most sought after by savers today. This is a big step forward on CDC. But it is clear to us there needs to be more to come to keep building momentum. For instance, decumulation only CDC schemes and allowing a wider variety of risk sharing mechanisms, all supported by a default retirement process, would be top of the list.

“As an industry we must do all we can to deliver this. Innovating in, and supporting the growth of, multi-employer CDC will help enable this.”