News & insights

TPT Retirement Solutions has held roundtable discussions with interested businesses on launching multi-employer Collective Defined Contribution (CDC) schemes.

18 employers in the housing sector attended events held in July. David Pitt-Watson, co-chair of the CDC Forum at the Royal Society for Arts, joined the events to discuss the CDC story so far, its principles and potential legislative timelines. The talks also covered the benefits to employers and members available through setting up a multi-employer CDC scheme, as well as any challenges that employers may face if they decide to join the new type of scheme. TPT is planning to hold additional events on multi-employer CDC schemes later this year.

TPT hosted the roundtables as the Government published its feedback to its consultation on Extending opportunities for collective defined contribution pension schemes. The feedback stated the Government believes “CDC will have an integral role in the future of pensions in this country” and it wants to “ensure as many savers as possible can take advantage of the benefits of CDC.” The Government plans to publish draft regulations to extend CDC provision from single employer schemes to whole-life multi-employer schemes in the Autumn of this year.

Joining a multi-employer CDC scheme has several benefits for existing Defined Benefit (DB) and Defined Contribution (DC) scheme employers. A CDC scheme would offer a whole-of-life pension that could be expected to provide better outcomes for members compared to DC alternatives at the same cost. This could enable firms that offer a CDC scheme to attract and retain talent by standing out.  A CDC scheme is also much less burdensome and costly for employers compared with a DB scheme. Firms can still offer their employees a generous pension, but it doesn’t require the open-ended sponsor guarantee. Therefore, CDC could also be particularly beneficial to DB employers as it removes the open-ended commitment.  

Andy O'Regan, Client & Strategic Partnerships Director at TPT Retirement Solutions, comments: 

"As a multi-employer Master Trust which offers both DB and DC to members, a proposition like CDC which combines attributes of both DB and DC would fit well with our capabilities and expertise. We are excited to see how demand for a multi-employer CDC scheme shapes up through these roundtable events. At these events, we are speaking to employers about their willingness to join a Multi-Employer CDC, gauging appetite and listening to feedback. We would encourage interested employers in any sector to get in touch with us about future events.

We believe CDC schemes have the potential to significantly improve the retirements of millions of people and we will be monitoring whether there is sufficient demand. Employers, scheme members, and the wider economy could all benefit from their introduction, and we hope to see their increasing adoption in the coming years."