The Pensions Regulator (TPR) has published its revised Code of Practice for the authorisation and supervision of collective defined contribution (CDC) schemes,[1] following consultation at the end of last year.
The revised code is an important step in opening the market to new multi-employer CDC models for non-associated employers. The updated framework is expected to come into force in mid-October 2026, alongside wider legislative changes taking effect this summer.
So what is changing – and why does it matter?
Expanding the CDC market
The original CDC regime, introduced in 2022, was designed around arrangements for a single employer or a group of associated employers. Currently, there is only one CDC scheme in existence, which is for employees of Royal Mail. TPR’s revised code expands that framework to accommodate multi-employer CDC schemes for unconnected employers, paving the way for commercial providers and industry-wide arrangements to enter the market.
The revised code sets out how TPR will assess applications for authorisation and supervise schemes on an ongoing basis. Although much of the existing framework remains familiar, the updated guidance reflects a clear regulatory focus on governance, operational resilience and member protection.
What schemes will need to show
TPR continues to expect CDC schemes to demonstrate strength across six core areas:
- fitness and propriety of those running the scheme;
- robust systems, controls and risk management processes;
- clear and balanced member communications;
- effective continuity planning;
- financial sustainability; and
- sound actuarial and scheme design.
In practice, this means trustees, strategists and key decision-makers will need to evidence appropriate experience, governance capability and operational oversight. TPR also places particular emphasis on member understanding, including ensuring communications clearly explain that benefit levels may fluctuate and are not guaranteed.
The revised code also confirms that schemes must be able to demonstrate resilience under stress scenarios, including how members would be protected if the arrangement faced financial or operational difficulties.
New rules for multi-employer CDCs
The most notable changes apply specifically to multi-employer CDC arrangements for unconnected employers.
Under the revised framework:
- trustees must remain separate from commercial promotion activity;
- marketing materials must be fair, clear and not misleading; and
- schemes must appoint a separate “scheme proprietor” entity distinct from the trustee board.
These additions reflect TPR’s concern about potential conflicts in commercially operated CDC arrangements, particularly where providers may seek to market schemes aggressively in a developing market.
The regulator is clearly signalling that governance independence and transparency will be central to securing and retaining authorisation.
More reporting, closer supervision
The revised code also expands the list of “significant events” that must be reported to TPR as soon as reasonably practicable.
For multi-employer schemes, this includes matters such as misleading promotional activity, material business plan changes, missed financial or operational targets, liquidity concerns and changes affecting financial reporting. This sits alongside TPR’s increasingly proactive and evidence-based supervisory approach more generally across the pensions market.
The code confirms that TPR may request additional information, review governance and operational documentation, and engage directly with trustees and scheme managers on an ongoing basis. In particular, multi-employer schemes can expect continued scrutiny of financial sustainability, governance controls and delivery against business plans.
Why this matters
Although the immediate impact is limited by the relatively small size of the current CDC market, the revised code is still significant.
It demonstrates continued regulatory support for CDC as part of the UK’s long-term pensions landscape. Secondly, many of the themes running through the revised framework, such as governance standards, operational resilience, member communications and evidencing good decision-making, reflect broader regulatory expectations across occupational pensions more generally.
In that sense, the revised code may offer a useful indication of where wider pensions supervision is heading.
What next?
The revised code is expected to apply from mid-October 2026, with regulations enabling unconnected multi-employer CDC schemes due to come into force on 31 July 2026.
In the meantime, prospective providers are likely to spend the coming months developing governance structures, operating models and authorisation evidence ahead of applications.
TPR has already indicated it is in discussions with several potential market entrants and a number of master trust providers have publicly expressed interest in participating. Industry initiatives are also beginning to emerge, including proposals for “Pensions Mutual”, a co-operative CDC provider focused on inflation-linked retirement income.
Once authorised, schemes are generally expected to begin operating within 24 months of TPR receiving an application, although extensions may be available in limited circumstances.
Whether CDC becomes a mainstream feature of the UK pensions market remains to be seen. However, the revised code makes one thing clear: TPR intends to apply close and continuing scrutiny as the market develops.
[1] The Pensions Regulator, 29 May 2026, “Code of practice: Authorisation and supervision of collective defined contribution (CDC) schemes”. Available here: https://www.thepensionsregulator.gov.uk/media/fqrj1ltu/tpr-cdc-code-of-practice-for-laying-29-april-2026.pdf
Ameena Ahmed is a Trainee in the Dentons Pension team, based in the London office – for any further queries in relation to the above, please contact ameena.ahmed@dentons.com
