The UK government has confirmed it will proceed with changes to the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 to allow authorised collective defined contribution (CDC) pension funds to receive bulk transfers of money purchase benefits without member consent.
The amendment will extend existing provisions, which already permit transfers into authorised master trusts without consent, to CDC schemes authorised under Part 1 of the Pension Schemes Act 2021.
The Department for Work and Pensions (DWP) said the change reflects the fact that both master trusts and CDC schemes are subject to a “robust authorisation and supervision regime”, which significantly reduces the risk of member detriment.
It added that collective money purchase benefits remain a form of money purchase benefit, with members retaining a statutory right to transfer out until benefits are crystallised.
The government said 31 responses were received to the consultation, with 25 respondents broadly supportive of the approach, although a number raised implementation questions. Six respondents opposed the proposal, citing concerns about potential member harm and questioning whether the provision should apply to retirement CDC schemes.
Several respondents also raised practical issues around advice requirements, opt-out rights and employer involvement in transfer decisions.
The government confirmed that trustees will remain responsible for determining whether transfers are in members’ interests and that they are expected to engage with employers, although decision-making will rest with trustees under fiduciary duty.
It also confirmed a one-month minimum notice period for members ahead of any transfer, and clarified that the provision will apply only to occupational pension schemes.
In a statement, TPT Retirement Solutions welcomed the government’s response, highlighting the significance of the transfer reforms for the development of CDC.
Ruari Grant, head of policy and external affairs at the firm, said: “The confirmation that authorised CDC schemes will be able to receive transfers without member consent is an important step. It helps create a practical framework through which employers and trustees can transfer members into well-governed, collective arrangements where they judge this to be in members’ best interests.”
“With the right regulatory framework in place, whole-of-life CDC has the potential to be a real positive addition to the UK pensions landscape,” he added.
The regulations are expected to come into force alongside wider CDC implementation measures at the end of July, subject to parliamentary approval.
