Defined contribution (DC) pensions place "huge burdens" on savers when making retirement decisions, with collective defined contribution (CDC) schemes offering a potential "third way" between traditional defined benefit (DB) and DC, Aptia strategic adviser and former Pensions Minister, Guy Opperman, has argued.

Speaking at the Pensions UK Annual Conference 2026, Opperman warned that many savers were ill-equipped to manage the complex decisions associated with DC pensions.

"You've got traditional DB, which, in each and every country around the world, is on the decline or is absolutely diminished," he said.

"You've got DC placing huge burdens on the individual, not all of whom are able to deal with the decisions that they're going to have to deal with.

"I do think we are at a proper tipping point," he stressed, pointing to the introduction of the multi-employer CDC regulations on 31 July.

He suggested that the number of organisations interested in establishing CDC arrangements was already "well into double figures", with support emerging across the private sector, trade unions and government.

This claim was supported by a survey conducted during the conference session, which revealed that four in five (80 per cent) pensions industry professionals were confident that unconnected multiple employer schemes (UMES)-CDC schemes could deliver better retirement outcomes than traditional DC arrangements.

However, the findings also highlighted a disconnect between industry confidence and employer appetite, with just a third (33 per cent) of respondents reporting that their organisations were actively exploring UMES-CDC.

Another 21 per cent said they were monitoring developments, while 27 per cent said their organisation was not currently considering CDC.

Despite this, nearly three-quarters (73 per cent) expected UMES-CDC to become a mainstream workplace pension option in some form within the next five years.

The research identified employer demand as the biggest obstacle to wider adoption, with 63 per cent of respondents saying their employers were not yet actively seeking CDC solutions.

This compared with 18 per cent who highlighted member understanding and 9 per cent who cited implementation costs and complexity.

Making the case for employers to consider CDC, Opperman suggested the potential benefits extend beyond retirement outcomes to workforce retention and employee engagement.

"In certain sectors, you really want to hang on to those key employees, and having a pension system that really ties everybody in... actually helps that discussion and that debate of actual staff retention," he said.

He also acknowledged that CDC would initially suit larger employers, with smaller businesses unlikely to adopt the arrangements until accessible products became available.

"The nature of pension change in any country, and particularly this one, you start with the big providers first, always," he noted.

Opperman suggested that the government's guided retirement reforms could accelerate CDC adoption, as providers consider how to meet new requirements to offer decumulation solutions.

However, he cautioned against overstating CDC's potential benefits, particularly claims that it could deliver retirement outcomes 60 per cent better than conventional DC.

Meanwhile, Aptia's survey found that investment capability would be the most important consideration when selecting a CDC provider, cited by 34 per cent of respondents.

Administration and technology, and track record and scale, were each identified by 20 per cent.

Commenting separately on the survey findings, Opperman described it as highlighting a "fascinating contradiction" in the market.

"Pension professionals are broadly confident that CDC can help improve retirement outcomes, yet many organisations remain hesitant to take the next step," he added.

"The challenge is no longer whether CDC can work, but how the industry builds confidence among employers and demonstrates its practical value.

"The findings also show that strong investment expertise, effective administration and proven scale will be critical as commercial CDC arrangements come to market.

"As the industry moves from policy discussions to implementation, providers, trustees and employers will need to work together to ensure CDC's potential can be translated into tangible benefits for members."

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