The multi-employer collective defined contribution (CDC) regulations went live on 31 July. And while the regulations mark an important milestone, industry experts caution that the success of multi-employer CDC will depend less on legislation and more on scheme design and execution.
The Pensions Regulator (TPR) has issued a new code of practice that expanded the existing framework to allow CDC schemes to operate across multiple unconnected employers in May 2026, with authorisation applications open from 31 July.
TPT Retirement’s head of policy and external affairs, Rauri Grant, said the authorisation process is likely to be rigorous, meaning the first schemes are unlikely to receive approval until next year. He also expects only a small number of providers to enter the market.
In May 2025, TPT Retirement announced it will launch a multi-employer CDC with plans to complete authorisation by the end of 2026, and in March 2026, Church of England Pension Board also confirmed exploring CDC arrangements.
Grant said: “[Multi-employer] CDC as a model is about bringing together lots of employers, sectors into a scheme and leveraging that scale.
“We’re not expecting there to be lots of schemes,” he added.
Hari Mann, co-chair of CDC Forum, said the multi-employer CDC regulations coming into force was another “significant milestone” in the development of CDC in the UK.
Mann said: “With schemes now able to apply for authorisation, we’ll start to see which providers are ready to begin their CDC journey. With the likes of TPT and the Church of England already signalling their intent, the momentum behind the CDC is becoming clear.”
While also welcoming the regulations, Al Greenlees, head of investment strategy at Van Lanschot Kempen, he warned that contribution levels and scheme design would be critical.
He explained: “If you keep putting too low a set of contributions into CDC, even with all of the government’s hopes for 60% higher pots from longer staying invested for longer and from pooling longevity, if you still don’t put enough money in in the first instance, the reality is that the pensions may still disappoint.”
Greenlees also urged policymakers to learn from the Netherlands’ experience, arguing that poor design and weak member communications can undermine confidence. Instead, UK schemes should focus on fairness, transparency and resilience to investment, interest rate and communication risks.
Paul Waters, head of DC markets at Hymans Robertson, agreed that CDC has the potential to improve retirement adequacy by pooling longevity risk and simplifying retirement decisions.
However, he said the long-term success of the model would depend on how schemes are designed, governed and operated, with the first authorised schemes playing a key role in building market confidence.
