Collective Defined Contribution

We consult with employers, trustees, providers, policymakers and regulators on the development of CDC, across single-employer CDC, multi-employer CDC and Retirement CDC arrangements as well as other risk-sharing designs. WTW also sponsor LifeSight, who were the first master trust to announce an intention to launch a Retirement CDC offering.

We would be very happy to help you consider whether, and how, to introduce CDC pensions for your organisation.

Our experience includes:

Advising employers and trustees, on provision of CDC pensions
Engaging directly with government and regulators on the ongoing development of the UK's CDC framework
Extensive practical expertise of the whole process from scheme design and actuarial modelling through to authorisation, implementation and ongoing operation
International expertise across CDC and other risk-sharing pension arrangements
Leading the actuarial and investment aspects of development of the UK's first CDC initiatives
Acting as a leading CDC scheme actuary and adviser in the UK market

What is CDC?

CDC pensions are a type of collective retirement provision which provides members an annual income for the whole of their retirement. This is an alternative option for employers, compared to the traditional options of DB pensions and individual DC pensions. It could also become an alternative option for individuals with DC pensions at retirement. The key features of a CDC pension are that:

It is expected to provide a materially higher benefit than from a typical DC pot used to buy an annuity at retirement, with the same level of contributions.

Pension increases vary depending on the funding level, so costs are fixed for employers.

The benefit is in the form of a pension for life, avoiding the possibility of running out of money (as could be the case with a drawdown pot) or needing to make difficult decisions into old age. CDC pensions can come in different forms:

Whole-of-life: Where a CDC pension is built up while an individual is working and then paid out in retirement
Retirement CDC: Where contributions are built up in an individual DC pot, which is then used by that individual to buy a CDC pension at retirement
Multi-employer or master trust: Where an employer can join a scheme alongside other employers to share, or outsource, the cost and governance associated with setting up and running a CDC pension scheme

Following the expansion of legislation to support multi-employer CDC arrangements and the continuing development of Retirement CDC, employers, trustees and providers now have new opportunities to improve retirement outcomes whilst maintaining fixed contribution costs.

In particular, all UK DC schemes will need to comply with Guided Retirement, arising from the Pension Schemes Act 2026. Retirement CDC is ideally placed to act as the trustees' chosen retirement income default for many members who would like a cost-effective income that will be paid for their retired life, managed for them by trustees.

As the market evolves, organisations are increasingly evaluating where CDC could fit within their wider retirement strategy. We can help employers, trustees and providers understand the opportunities, navigate regulatory requirements and build CDC solutions that deliver better member outcomes.