The Church of England Pension Board (CEPB) has said it is exploring the scope for a hybrid scheme that draws on features of both defined contribution (DC) and defined benefit (DB) pensions.
In its annual review published at the end of February, the CEPB has said its work to simplify arrangements and “ultimately to offer better retirement outcomes to our members” continues as the board explores the scope for “a new type of pension arrangement for Church employers and their employees”.
It said that collective defined contribution (CDC) draws on some of the “best features” of both DC and DB pensions and could offer members “higher starting pensions payable for life, provided by an ethically invested, professionally managed collective fund”.
As part of the move, the board said that employers would benefit from a fixed, predictable cost, while members would gain from scale, risk‑sharing and disciplined stewardship aligned with our values.
CEPB added that it has been contributing to development in the CDC space for “some time” and welcomed the publication of the draft code by the Pensions Regulator (TPR), and intends to assess the regulations and new code in detail in 2026.
It said: “If all looks good, we hope to apply for authorisation to run this new type of pension later in 2026, with a view to offering it to the Church from 2027.”
CEPB has previously expressed an interest in seeing how a multi-employer CDC scheme could work back in 2024, following the successful launch of the Royal Mail CDC scheme in October 2024, which, according to the latest valuation, delivered a significantly above-inflation pension increase of 6.4% (CPI + 2.6%) for more than 100,000 postal workers in its first year.
UK pensions minister Torsten Bell confirmed the regulations allowing for multi-employer CDC in April 2025, and in December TPR published a draft code consultation setting out the criteria for authorisation, the regulator’s expectations of multi-employer CDC schemes and how it will use its powers to bring the new innovation to market.
Since then, in May 2025, TPT Retirement announced it will launch a multi-employer CDC with plans to complete authorisation by the end of 2026.
More pension funds are expected to announce their plans for CDC arrangements as the regulations and legislation progress over the next few months.
