The first Collective Defined Contribution (CDC) pension scheme has been launched today, more than two years after the schemes were given the green light in the UK.

Royal Mail’s Collective Pension Plan (RMCPP), incorporating Collective Defined Contribution (CDC) benefits, has been developed in collaboration with the Communication Workers Union (CWU).

The scheme will offer more than 100,000 Royal Mail employees a cash lump sum and an income in retirement.

Angela Gough, director of group pensions at Royal Mail, said it was “an exciting development for Royal Mail and for the pensions industry.”

She said: “The Collective Plan is the future of pensions in Royal Mail. It’s the first of its kind in the UK, and we’ve worked hard with our unions, the Government, the Pensions Regulator, and the Trustee of the Collective Plan to make it possible.”

Andy Furey, national officer, CWU said: “We are confident the innovative benefits within the Collective Plan will provide a better outcome for our members than a traditional Defined Contribution scheme. The twin attributes of an income for life and a guaranteed lump sum at retirement are important benefits for our members.”

Professional services firm Aon said the launch ushers in a new era for UK pensions.

Chintan Gandhi, partner and head of collective DC at Aon in the UK, said: “The launch of the UK’s first CDC pension scheme is an important milestone in the UK’s pensions landscape. It has been more than seven years in the making.



“Using this as a stepping-stone, we see tremendous value in the Government moving on to the swift introduction of scalable whole-life multi-employer CDC schemes. We believe these have the significant potential to help over 30 million workers in the UK build up a pension - including the self-employed.”

Collective Defined Contributions (CDC), were officially launched in August 2022. They allow employers to share pension scheme costs with other employers by pooling resources. CDC schemes can serve several employers at once.