Aon intends to introduce a whole-life multi-employer collective defined contribution (CDC) section to sit alongside defined contribution (DC) benefits within the Aon master trust, from 2028.
Aon said that with the introduction of the CDC section, employers will have the opportunity to default their employees’ contributions into a whole-life CDC section of the master trust that will help them to build up an income for life in retirement, which is expected to keep pace with the cost of living and without them needing to make complex decisions at retirement.
Employers will also be able to default employees into a DC section, or offer them a combination of both.
The introduction of the section is subject to regulatory approval.
The news comes as the multi-employer CDC regulations went live on 31 July, marking an important milestone in the development of CDC in the UK, allowing schemes to apply for authorisation.
Until now, only TPT Retirement had confirmed plans to launch a multi-employer CDC, with plans to complete authorisation by the end of 2026.
In March 2026, the Church of England Pension Board also confirmed that it is exploring CDC arrangements.
Aon has previously advised Royal Mail on the design of the UK’s first CDC pension scheme, the Royal Mail Collective Pension Plan, which launched in October 2024 for over 100,000.
Following Royal Mail’s launch, the government has been introducing regulatory changes to facilitate wider commercial rollout of such schemes.
It is expected to publish draft regulations for retirement CDC later this year, ahead of legislation coming into force in 2027.
Michael Clare, head of EMEA wealth solutions for Aon, said: “Aon was involved throughout the process that brought this new type of pension scheme into existence, so we are particularly excited to announce our intention to launch a whole-life CDC section within The Aon MasterTrust. CDC is an innovation that helps address the evolving needs of our clients and their employees. Offered alongside DC, it ensures we are introducing CDC in a way that caters effectively for the differing needs of our individual clients and their workforces.
“As we also continue to explore the future introduction of Retirement CDC within The Aon MasterTrust, we eagerly await the initial draft Retirement CDC regulations which are expected this autumn.”
Chintan Gandhi, partner and head of collective DC for Aon, added: “Whole-life CDC pensions provide a powerful tool to attract, reward, retain and retire employees on time, and which strengthens the employee value proposition in competitive labour markets. We believe that CDC could revolutionise pensions in the UK, creating value for both employees and employers.”
Gandhi added that Aon is now looking to continue its engagement with a wide range of employers, sectors and unions in the UK, including seeking feedback to help shape its plans for CDC.
