Your Workplace Pension Could Move to a New Type of Scheme Without Asking You First

New rules that came into force on 31 July 2026 give pension trustees a power they didn't have before: the ability to move members' defined contribution (DC) pension pots into a collective defined contribution (CDC) scheme without asking each individual member for consent. If you have a workplace pension, here's what that means and what to check.

What changed

The government confirmed it will amend the Occupational Pension Schemes (Preservation of Benefit) Regulations 1991 to let trustees bulk-transfer members' money-purchase (DC) benefits into an authorised CDC scheme, mirroring a power that already existed for transfers into master trusts. The change took effect once amending regulations came into force on 31 July 2026.

CDC schemes work differently from a normal DC pot: instead of you owning an individual pot of money that rises and falls with markets, members pool their contributions and investment risk together, and the scheme aims to pay a target retirement income based on collective performance — closer to how a traditional defined benefit scheme is run, but without a guarantee.

The safeguards that do exist

Crucially, trustees can only use this power to move members into accumulation CDC schemes — ones you're still paying into and building up benefits in. They cannot use it to move members into a retirement/decumulation CDC scheme, where benefits have already crystallised into an income, because members might not be able to transfer back out once that happens. If you are transferred without consent into an accumulation CDC scheme, you keep the right to transfer out again until your benefits crystallise, and the law requires at least one month's advance notice, including an explanation of what CDC is and how it differs from your current arrangement.

The Department for Work and Pensions says the reasoning is that both master trusts and CDC schemes sit under a "robust authorisation and supervision regime" from the Pensions Regulator, which it argues significantly reduces the risk of harm to members compared with earlier, looser transfer rules.

Checklist: what to do if you get a transfer notice

• Read the notice in full, not just the headline. It must explain what CDC is, how your target income is calculated, and how it differs from your current pot.
• Check whether it's an accumulation or decumulation CDC scheme — only accumulation transfers can happen without your consent.
• Confirm you still have the right to transfer out before your benefits crystallise, and note any deadline to act.
• Compare the CDC scheme's target income approach with your current pot's flexibility — CDC pools risk collectively, so your eventual income isn't a fixed, individually-owned balance.
• Ask your employer or scheme administrator for the Pensions Regulator's authorisation status of the receiving CDC scheme.
• Get independent guidance from MoneyHelper's Pension Wise service (free, government-backed) before making any decision about opting out or transferring elsewhere.

How this compares internationally

Collective, risk-pooled pension models are well established in the Netherlands, where CDC-style schemes have run for decades and are often cited as the template the UK is borrowing from. The US retirement system, by contrast, relies overwhelmingly on individually-owned 401(k) accounts with no equivalent collective risk-pooling structure, while Australia's superannuation system is also individually-owned, though its default MySuper products pool investment management in a broadly similar (if not risk-sharing) way.

Key Numbers

• 31 July 2026 — date the new transfer power took effect
• 1 month — minimum advance notice members must receive

Sources

• Trustees can transfer members into CDC schemes without consent — Norton Rose Fulbright
• DWP extends master trust-style transfer powers to CDC schemes — IPE
• MoneyHelper — Pension Wise

Educational content only — not financial advice.