Defined ambition pension schemes under the Pension Schemes Act 2015 [Archived]
Produced in partnership with Sharon Piert of CMS

The following Pensions practice note produced in partnership with Sharon Piert of CMS provides comprehensive and up to date legal information covering:

  • Defined ambition pension schemes under the Pension Schemes Act 2015 [Archived]
  • What is a defined ambition scheme?
  • What are the pension options for the implementation of defined ambition?
  • Flexible DB model
  • Providing greater certainty in DC arrangements
  • CDC schemes
  • Defined ambition in the Pension Schemes Act 2015
  • Form of PSA 2015
  • What did defined ambition mean in PSA 2015?
  • When did PSA 2015 definitions apply?
  • More...

Defined ambition pension schemes under the Pension Schemes Act 2015 [Archived]

ARCHIVED: This archived Practice Note provides information on the legal framework which had previously been put in place under the Pension Schemes Act 2015 to enable the creation of defined ambition schemes such as collective defined contribution (CDC) schemes. It is not maintained and is for background information only. For information on the current legal framework for CDC schemes, see Practice Notes: Collective defined contribution (CDC) schemes—an introduction and Collective defined contribution (CDC) schemes under the Pension Schemes Act 2021.

What is a defined ambition scheme?

One of the key principles of defined ambition is the idea of ‘risk sharing’ in the sense that neither the employer nor the members bear all or a majority of the risk in the pension scheme. A defined ambition pension scheme has some features that are found in a traditional defined benefit (DB) pension scheme and some features that are found in a traditional defined contribution (DC) pension scheme.

The Department of Work and Pensions (DWP), in its 2012 strategy paper, Reinvigorating Workplace Pensions, said that the:

'aim of a [defined ambition] pension would be to create greater certainty for members than is provided by a pure DC pension. It would also seek to ensure less cost volatility for employers than current DB pensions.'

In a traditional DB scheme, the employer tends

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