United Kingdom

Collective Defined Contribution Pension Schemes

Collective Defined Contribution (CDC) was introduced in the UK through The Pension Schemes Act 2021, offering an alternative pension scheme design to both Defined Benefit and Defined Contribution. Officially known as Collective Money Purchase, CDC is a pooled risk (or target pension) plan. Although plans with similar concepts have been widely used in several other countries including Canada and the Netherlands for a number of years, the UK’s implementation is unique.

CDC plans have some powerful, positive aspects that could improve retirement outcomes for many UK workers, including:

  • The security of a pension income for life
  • Collective investment by professionals not members
  • Benefits expressed in income terms not capital accounts
  • Not having to buy an annuity at poor times in the market.

The catalyst for CDC being introduced in the UK was the advent of Royal Mail’s CDC scheme design, this was following Aon’s extensive research on CDC design that we conducted from 2013 onwards. Further details of our research can be viewed in our White Paper The Case for Collective DC.

At Aon, we have significant expertise and insights on all aspects of CDC design and have extensively engaged with the Department for Work & Pensions, The Pensions Regulator and HM Treasury on the detail of this proposed design.

Find out More

If you would like to discuss how CDC can align with your pension scheme objectives, explore the Government's proposals further, or speak to us on our latest research and briefings, please speak to your usual consultant or one of our CDC specialists below:

Chintan Gandhi +44 1372 733 322
[email protected]

Madalena Cain +44 20 7086 9040
[email protected]

Matthew Arends +44 20 7086 4261
[email protected]


Aon Solutions UK Limited - a company registered in England and Wales under registration number 4396810 with its registered office at The Aon Centre, The Leadenhall Building, 122 Leadenhall Street, London EC3V 4AN.

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