Collective Money Purchase Benefits
Collective money purchase is the legislative term for collective defined contribution ("CDC") schemes where contributions into the scheme are pooled and invested with a view to delivering an aspired benefit level. An important principle of CDC schemes is that contributions into the scheme are fixed, and the benefit level offered can only ever be a target or an estimate. It is not guaranteed by the employer and members should recognise from the outset that the benefit levels aspired to may not be achieved and that the level at which pensions are paid may fluctuate.
	The Government published a consultation on delivering CDC schemes in October 2018. 1
	Following the consultation, the Government committed to legislate to allow CDC schemes to operate in the United Kingdom (UK).
	Part 1 of the Act provides the legislative framework to establish and operate CDC schemes. The Act refers to CDC benefits and CDC schemes using the terms Collective Money Purchase Benefits and Collective Money Purchase Schemes. It takes this approach to be consistent with existing terminology in pensions legislation.
	Part 1 includes provision for CDC schemes to be authorised and supervised by the Pensions Regulator and requirements to disclose certain information to members to ensure that there is appropriate communication and transparency about how the scheme operates.