The scheme, modelled on a system used in Holland, would allow workers to be able to pay into funds shared with potentially thousands of other members to reduce costs.
Supporters argue that pension incomes will be higher due to lower costs from running collective, rather than individual funds, but the scheme has critics, who believe the benefits are unproven and uncertain.
{desktop}{/desktop}{mobile}{/mobile}

True Potential managing partner David Harrison said: "Introducing Dutch-style collective pensions into the workplace, ministers say, will offer people better value by pooling the risk, than if funds were run individually.
"This is probably a good time to point out that Dutch politicians have recently called for collective pensions to be replaced by the ones we have here in the UK, such is the poor performance of some of their collective defined contribution schemes.
"The fact is that no one knows what pension they will get in 20, 30, or 40 years' time and the introduction of collective pensions won't change that.
"We still need greater simplicity, accessibility and transparency to help build confidence and to get people saving again."
Schroders' Head of Defined Contribution, Stephen Bowles, said: "We welcome the increased focus on defined contribution (DC) pensions in today's Queen's speech. However, we wonder whether the introduction of rules to allow collective DC arrangements in the UK is a bridge too far for employers and the pensions industry?
"It comes on the back of a wave of pensions legislation in recent years, including auto enrolment, the liberalisation of post-retirement options in the Budget and the capping of charges.
"These fundamental changes are already stretching all those involved in providing workplace pensions. The industry may now struggle to effectively implement collective DC, which is a completely new concept for the UK.
"Quite apart from the impact on a market already in flux, there are also many well documented flaws with CDC that are yet to be addressed. They include questions of fairness across the generations, whether risks are properly managed and whether CDC can work effectively against the background of the UK's ageing population and shrinking workforce."
Broadstone has said it is "sceptical about whether they will ever get off the ground in the UK".
Katja Hall, CBI deputy director-general, said: "Collective Defined Contribution schemes would not be for everybody.
"While they could mean better returns, less risk and lower funding requirements, savers need to understand that even in retirement their pots could decrease because there are no individual controls over how pensions are drawn down."
Carol Knight, operations director at TISA, welcomed the pension reforms, which were first announced in the Budget, and have now today been put forward for implementation via two Bills. These include the scrapping of the obligation to buy an annuity.