The Pensions Regulator (TPR) has this week laid its new code of practice for the authorisation and supervision of collective defined contribution (CDC) pension schemes before Parliament.
This key step will enable the code to complete its legislative passage in time for trustees to apply from the 1st of August for authorisation to operate a CDC scheme. The code is expected to be made after it has laid in Parliament for 40 days.
Guy Opperman, Minister for Pensions, said: “Collective defined contribution pension schemes have the potential to transform the UK pensions landscape and deliver better retirement outcomes for millions of pension savers.
“I therefore welcome the laying of TPR’s code before Parliament. We have seen the positive effect of CDC schemes in other countries and this code brings us one step closer to making them a reality here at home.”
The code sets out how trustees can apply for authorisation and how TPR will assess schemes against the statutory authorisation criteria at the initial application stage and throughout ongoing supervision.
The code reflects regulations for CDC schemes published by the Department for Work and Pensions (DWP) and made in March 2022.
The Pension Regulator has also published its response to the CDC code consultation that ran for eight weeks earlier this year. During the consultation period 24 responses were received.
CDC schemes will initially be limited to those set up by single employers, or two or more connected employers. The Pension Schemes Act 2021 contains powers to enable further developments of the CDC market, such as multi-employer schemes. TPR will be working with the DWP to expand CDC schemes to a wider range of users.
The Pension Schemes Act 2021 introduced an authorisation and supervision regime to ensure only CDC schemes that are well run and built on sound foundations can operate and that TPR has powers to intervene when necessary.
For details of the TPR response to the consultation, see here: