TPT Retirement Solutions has submitted an application to the Pensions Regulator for permission to operate a collective defined contribution (CDC) pension scheme – the first provider to do so.
The company plans to establish a multi-employer arrangement, provisionally called the TPT Collective Pension Scheme, and said in a statement that it had already attracted interest from 10 employers with more than 20,000 members in total.
The scheme is overseen by a trio of professional trustees, appointed last year: Zedra’s Kim Nash is chair, alongside Vidett’s Alison Hatcher and Falcon Trustees’ Venetia Trayhurn.
David Lane, CEO at TPT Retirement Solutions, said: “Submitting our application is a major milestone for TPT and for the development of collective pensions in the UK. The introduction of CDC will enable us to expand the breadth with which TPT is able to deliver secure retirement income for our members.
“CDC is not intended to replace defined benefit and traditional DC, but can fill an important gap between them, giving employers greater choice and members the potential for a higher and more predictable retirement income.”
The new arrangement will be a whole-of-life CDC scheme, meaning members will save into a collective pool during the accumulation phase and draw an income from the pooled arrangement when they retire.
TPT said the pooling of members and savings pots in this way could “offer members a higher and more predictable retirement income than traditional individual DC arrangements”.
“CDC schemes offer a different way forward, one where the ups and downs of the market are shared across the group, not shouldered alone, giving people a more predictable income to rely on in later life.”
Torsten Bell, the pensions minister, said: “Too many people reach retirement unsure whether their savings will stretch far enough. CDC schemes offer a different way forward, one where the ups and downs of the market are shared across the group, not shouldered alone, giving people a more predictable income to rely on in later life.
“This is just one part of our broader drive to reform pensions so they work harder for savers, cutting costs, improving returns, and making sure the system delivers the security people have earned after a lifetime of work.”
The CDC application follows the authorisation of TPT’s defined benefit superfund, and means the company will have six product options if this latest offering is approved.
