Employers Welcome New Pension Scheme Reform
The pensions industry has welcomed the introduction of regulations for multi-employer collective defined contribution arrangements, with the focus now shifting towards implementation. Regulations to enable unconnected multi-employer schemes came into force on July 31, as set out in the government’s workplace pensions updated roadmap.
The government laid the regulations for these arrangements in October 2025, aiming to allow the expansion of schemes to more employers. Guy Opperman, Aptia strategic adviser and former Pensions Minister, said the introduction of collective defined contribution is a major step towards making it a reality for millions more savers.
Opperman argued that collective defined contribution has the potential to offer significantly improved member outcomes and greater income stability in retirement. Recent research carried out by Aptia found that 70 per cent of people approaching retirement are concerned their pension savings will not keep pace with the cost of living.
Opperman said the focus must now be on turning the promise of collective defined contribution into practical, trusted solutions. He emphasized the need for building awareness and understanding, delivering clear and engaging member communications, achieving the scale needed to maximise value, and maintaining strong governance.
Dan McLaughlin, Festina Finance UK country head, noted that while regulation, governance, and scheme design are important, a framework alone will not deliver successful outcomes unless equal consideration is given to how collective defined contribution will operate in practice.
McLaughlin stated that high-quality data, robust administration processes, and flexible technology infrastructure will be critical to managing complex calculations and supporting effective decision-making. He added that recent surveys have indicated a growing interest in collective defined contribution arrangements, but also a degree of caution.
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Getting the operational foundations right will be essential to building confidence among trustees, employers, and members. The right technology and operational capability will help schemes manage collective defined contribution effectively, adapt as requirements evolve, and ultimately realise the full potential of this new model.
Paul Waters, Hymans Robertson head of DC markets, described the opening of the authorisation process for multi-employer whole of life schemes as a major and welcome milestone. He said that collective defined contribution can play a meaningful role in addressing the significant challenge of retirement adequacy.
By pooling longevity risk and investing collectively, collective defined contribution offers the prospect of higher retirement incomes than other DC alternatives, alongside a simpler member experience with fewer complex decisions at retirement. Waters noted that the trade-off for this is typically less flexibility, or the ability to pass on a legacy if you die.
While authorisation is an important step, Waters said that the long-term success of collective defined contribution will ultimately depend on how schemes are designed, governed, and operated in practice. The experience of the first generation of authorised schemes will be critical in building confidence across the market and demonstrating how multi-employer collective defined contribution can deliver in practice for both employers and members.
Waters added that his company is excited to be part of this with their clients as collective defined contribution moves towards becoming an established part of the UK pension tech setting. As the industry moves forward, it will be important to consider how collective defined contribution compares to other pension models and how it can be used to improve retirement outcomes for savers.
