TPT Retirement Solutions, which runs the Social Housing Pension Scheme, has announced plans to launch the UK's first multi-employer Collective Defined Contribution (CDC) pension scheme, marking a significant development for social housing providers seeking sustainable pension solutions. 

What is CDC?

CDC schemes pool contributions from employers and employees into a collective fund, providing members with a target income in retirement. Unlike Defined Benefit (DB) schemes, CDCs do not guarantee specific payouts, and unlike Defined Contribution (DC) schemes, they share investment and longevity risks among members. This structure aims to offer more predictable retirement incomes and potentially higher returns due to collective investment strategies. 

Timeline for implementation

TPT aims to secure regulatory approval for its CDC scheme by the end of 2026, with contributions expected to commence in the first half of 2027. This initiative follows the Royal Mail's launch of the UK's first single-employer CDC scheme in 2024. 

Relevance for social housing providers

Social housing providers, many of whom participate in TPT's Social Housing Pension Scheme (SHPS), may find CDC schemes particularly beneficial. CDC offers a middle ground between the cost predictability of DC schemes and the benefit security of DB schemes. 

For employers, this could mean more stable contribution rates and reduced exposure to pension deficits. For employees, CDC schemes may provide more reliable retirement incomes compared to traditional DC plans.

As the regulatory framework for multi-employer CDC schemes develops, social housing providers should stay informed about these changes. Engaging with pension advisors and considering the potential transition to CDC could be a strategic move to enhance retirement outcomes for employees while maintaining financial sustainability. 

For more information on TPT's CDC scheme and its implications for your organisation, contact Doug Mullen or Lauren Broderick.