Business plan (multi-employer CDC schemes only)

CDC code in force: 31 July 2026

1. A business plan is required as part of our assessment of the financial sustainability of a multi-employer CDC scheme. It is prepared by the scheme proprietor and sets out the schemes’ objectives and how these will be achieved. A business plan is a comprehensive narrative document providing the detail required in legislation and in this code.
2. The business plan must be submitted by the trustees as part of the application for 
   authorisation and the information provided within the plan must not be more than six 
   months old on the day that the application for authorisation is submitted¹.
3. The business plan must be reviewed on an annual basis and revised within three months of identifying that it needs to be updated. Any change to the business plan arising from the annual review must be notified to us as soon as they are completed. Changes at any other time should be notified to us within three months of the business plan being revised. A scheme proprietor may need to prepare an updated plan specifically for the purposes of the application².
4. We expect the business plan to be comprehensive and to accompany accounts from the scheme proprietor (where available). We also expect the scheme proprietor to provide us with all the information we need to assess their financial strength. This information will vary according to the circumstances of the scheme and the scheme proprietor.
5. The business plan must be prepared by the scheme proprietor and approved in writing by the trustees. There must also be a statement signed by the scheme proprietor confirming that they consider that the business plan gives a true and fair representation of the matters to which it relates³.
6. The business plan must provide comprehensive information on:
   1. the scheme’s objectives and strategy for meeting them
   2. estimates of the associated costs
   3. the class and liquidity of any assets held to meet the costs
   4. scheme income
   5. plans to meet any shortfalls
   6. scheme profit and loss
   7. the financial strength of the scheme proprietor
7. We are more likely to be satisfied that a business plan is viable where it is supported by robustly tested assumptions and is appropriately documented. We expect the business plan to be a detailed document that shows the scheme proprietor and trustees have carefully considered the needs and development of the scheme, legislative requirements, and code.
8. The business plan needs to be consistent with other elements of the authorisation criteria. For example, we would expect to see consistency between forecasts in the business plan and the capacity within systems and processes. Additionally, a business plan which relies on continued rapid growth is unlikely to satisfy us if the stated aim of the scheme is to remain as a niche provider to a certain industry.
9. The following information must appear in every business plan⁴:
   1. Any trading or brand name under which the multi-employer CDC scheme is known, promoted or marketed under and, if relevant, the name the scheme is registered under to comply with the Finance Act 2004⁵.
   2. The date when the scheme was established.
   3. The pension scheme registry (PSR) number.
   4. The HMRC reference number (PSTR).
   5. The address of the scheme’s office as notified to HMRC.
   6. The scheme administrator’s name and address.
   7. The scheme auditor’s name and address.
   8. The name of each trustee and the scheme proprietor.
   9. The effective date of the business plan.
   10. The period to which the business plan relates (which must be no less than three years and no more than five years from the effective date).
   11. The number of employers participating in the CDC scheme at the effective date.
   12. The number of scheme members at the effective date, broken down into active, deferred, and pensioners.
   13. A breakdown of the membership movements in the CDC scheme to include those joining, transferring from and leaving the CDC scheme, in each of the three years ending with the effective date.
   14. Where estimates are provided within the business plan, it must state the assumptions used in reaching the estimates and the circumstances and extent to which the actual scheme membership, contributions, income and costs may vary from the estimates.
10. A multi-employer CDC scheme should make every effort to supply the necessary information. If it is not possible to supply certain items, the trustees should explain why. If a provision of the code or the legislation does not apply because of the way the scheme operates or is designed, this should be clearly explained.

Business plan and triggering events

11. If a multi-employer CDC scheme has experienced a triggering event and we have approved an implementation strategy for the scheme, we may waive the requirement for a revised business plan to be submitted to allow efforts to be focused on implementation of the agreed continuity option. As part of our review of the trustees’ progress with any continuity option, we may ask for updates about certain aspects of the business plan. If a triggering event has reduced the value of the financial resources of the scheme, then a revised business plan, approved by the trustees, must be submitted to us no later than three months following revision⁶. It must detail the plans and timetable for restoring the scheme’s financial resources to a level to satisfy us that the scheme is financially sustainable. Where there is no such plan and the trustees are looking to pursue continuity option 1 or 2, full details of how this will be funded along with an implementation strategy must be provided.
12. If a multi-employer CDC scheme has experienced a triggering event and we have approved an implementation strategy for the scheme, we may waive the requirement for a revised business plan to be submitted to allow efforts to be focused on implementation of the agreed continuity option. As part of our review of the trustees’ progress with any continuity option, we may ask for updates about certain aspects of the business plan.
13. The costs incurred as a scheme nears the end of a triggering event period are very likely to have reduced the value of the financial reserves available to the scheme. Part of a scheme’s efforts to demonstrate that it has resolved a triggering event will include providing a revised business plan. This business plan should include the plans and timetable for restoring the scheme’s financial resources to a satisfactory level to meet the financial sustainability criterion.
14. Once a triggering event has been resolved and financial reserves are still being rebuilt, any subsequent business plan must include details of the progress made by the scheme against the plans it set out to restore the financial reserves it should hold or have first call over.

Business strategy

15. We will have to be satisfied that a multi-employer CDC scheme has a sound business strategy. This means that the objectives set out in the business plan need to be achievable and realistic, and that thought has been given to situations where the objectives are not met or are exceeded. A sound business strategy should normally lead to a point where a multi-employer CDC scheme considers that continuity option 3 is viable.
16. When assessing the business strategy, we will take account of a number of matters. The first of these are the scheme’s objectives. To the extent that there is a growth strategy, we will expect to see an illustration of how this is expected to be funded.
17. When providing estimates of future growth of membership, contributions, income and costs, we expect to see prudent assumptions. A scheme should be able to demonstrate that it has considered the consequences of failing to meet certain targets or assumptions used in its modelling. The parameters for all assumptions should be clearly set out so we are able to consider how reasonable they are. Consideration should also be given to the consequences of exceeding forecast growth.
18. Where a scheme is expecting to derive income from investments, such as from an annual management charge on scheme assets, we expect to see that the estimates of income received here are consistent with the investment mix set out in the statement of investment principles. Where income is derived in foreign currencies, we will expect any forecasts to include details of, or allowances for, currency fluctuations or hedging activities.
19. We also expect to see planning for any increases in reserves required in the future as a result of an expansion, in particular, of membership.
20. If the scheme also intends to offer decumulation options for members, then the potential additional costs related to this should be factored in. In particular, any additional costs associated with communications or advice to these members following a triggering event.
21. Where schemes present similar business strategies or identify the same or overlapping markets, we will not intervene to prevent competition or influence the market. We will, however, expect to see that schemes have considered the consequences of failing to meet their objectives.
22. The business plan should include details of whether the scheme proprietor is a participating employer in the scheme. By assessing the use of the scheme by its scheme proprietor, we gain a better picture of the scheme proprietor’s commitment to the scheme and its ability to distance itself from the scheme.
23. We expect to see allowances in the business plan for contingent events. These events are sometimes difficult to forecast, but may include allowances for correcting administration errors, break clauses in contracts, additional requirements from service providers and other costs that might only arise if things went wrong.
24. The distribution of contingent liabilities between scheme proprietor and schemes may vary but needs to be clearly divided between the parties. This means that the responsibility for meeting certain costs may fall into one camp or another. We anticipate that in most cases, the liability for particular costs will be clear in service contracts or the scheme documents. We would expect to see such contingent costs clearly divided between the scheme proprietor and trustees. Where the trustees are not clear whether it is being used by all or some participating employers for automatic enrolment, they should be clear whether the scheme is, or can be, a qualifying scheme.
25. The second area to note is whether the scheme is, or is planning to, operate in the consolidation of other schemes. This may be through a specific intention to acquire other schemes, or to market itself as a home for members and assets from an employer’s own trust scheme or from other schemes.
26. Some schemes, or sections of them, may be promoted or marketed to employers by commercial or non-commercial partners under a brand name that is different from the registered name. We should be made aware of situations where this is taking place and for the relevant scheme to detail all trading names, and any partner organisations, that it may have.
27. We are more likely to be satisfied if the following matters are addressed in the business plan:
    1. Business strategy and scheme objectives.
    2. Systems and processes.
    3. People.
    4. Target market.
    5. Costs, assets and liquidity plan.
    6. Continuity strategy.
    7. Other regulators. 

Business strategy and scheme objectives

28. The plan should include:
    1. details of existing and planned membership and full rationale on how the trustees expect to meet their objectives
    2. evidence that all costs have been fully considered, and sufficient monies have been appropriately earmarked to meet the scheme objectives (in addition to what is required for reserving)
    3. risk management
29. The business plan should show that:
    1. the scheme proprietor has considered and documented actual and perceived risks to the delivery of the business plan and has documented mitigations or processes for monitoring and managing each of these risks – for example, failure to meet targets or milestones
    2. there are appropriately skilled individuals taking responsibility for the management of risk monitoring against the business plan, and those individuals have access to the necessary management information and intelligence to properly carry out this task

Information about scheme proprietors

30. A scheme proprietor may have a single shareholder or be reliant on a particular individual or major shareholder. We would normally consider a scheme proprietor to be reliant on any person who exercises or controls (on their own or with any person they are acting with) 33% or more of the votes able to be cast on all or substantially all matters at general meetings of the company, or who owns 33% or more of the share capital of the company.
31. In these situations, we would expect the business plan to include details of the succession planning and any key person provisions covering the event that the shareholder or single individual ceases to meet the reliance test above. 

Systems and processes

32. Evidence provided should show:
    1. IT systems are capable of being updated and maintained effectively on an ongoing basis
    2. details of how data quality impacts the scheme

People

33. The plan should show:
    1. key resources have been identified, and they have the necessary skills and experience to deliver the objectives in the business plan
    2. there is a plan in place to ensure continuity of service

Target market

34. The plan should address the following:
    1. A significant component of any business plan is consideration of the target market for the CDC scheme. The size and nature of the target market will significantly influence the ability of a multi-employer CDC scheme to meet its target, particularly if there are ambitious growth forecasts, and the target market is small.
    2. Where multi-employer CDC schemes, whether commercial or otherwise, present similar business strategies or identify the same or overlapping markets, we will not intervene to prevent competition or influence the market. We will however expect to see that proprietors have considered the consequences of failing to meet their objectives.

Costs, assets and liquidity plan (CALP) (if not provided separately)

35. We expect to see prudent assumptions when estimating future growth of membership, contributions, income and costs.

Continuity strategy

36. The costs of dealing with a triggering event should be set out in the business plan. They will be used as part of the overall assessment of whether the scheme is financially sustainable – particularly in demonstrating that the scheme has adequate reserves to meet the costs of continuing to operate the scheme, in addition to costs in pursuing the relevant continuity option.
37. Charges for pursuing the chosen continuity option must be aligned with the business strategy and consistent with the financial information and assumptions provided.

Information about those preparing the business plan⁷

38. The business plan should include the name of each person involved in the production of the business plan and the position they hold in the scheme proprietor.
39. Where different aspects of the production of the business plan are distributed among various staff, we need to understand what discretionary ability each individual or division has. In most cases, the relevant individual will be the person with responsibility for signing of the business plan.
40. The business plan should include a declaration on the experience, knowledge, professional qualifications and competence of the person responsible for signing it of on behalf of the scheme proprietor.
41. The business plan should also include the name, role, and responsibilities for anyone who is in a position of influence, including but not limited to those subject to the fit and proper tests. Where an individual is subject to a fit and proper assessment, the details provided in the business plan can refer to this.
42. The business plan should also set out how the scheme proprietor has satisfied themselves that these individuals possess relevant skills, knowledge and experience, and any contingences that have been made for these individuals ceasing to act in their role.

Milestones and measurement

43. When setting out a scheme’s objectives, key delivery milestones must also be set out. These might include plans to reach or retain a certain number of members, or to review admission policies, by a particular point.
44. Milestones should be set out in the business plan at regular time intervals. For a new scheme, these milestones might be set quarterly, while for a more established or less growth-oriented scheme these might be set at annual intervals. Milestones should be set throughout the duration of the plan, with an indication of how critical each milestone is to the sustainability of the scheme. Milestones may also relate to key dates in agreements within contracts and with service providers.
45. As well as the milestones, a business plan must include details of the strategy that the trustees and scheme proprietor will adopt to achieve them. The approach to measurement and reporting of the milestones should also be taken into account.

Failure to meet targets or milestones

46. Any significant failure to meet a key milestone, target, estimate or assumption set out in the business plan is a significant event and must be reported to us as soon as reasonably practicable.
47. As the objectives, milestones and resources reflected in the business plan will differ for each scheme, we expect the business plan to outline what is considered to be a significant failure for the scheme.
48. We expect the business plan to set out the tolerance levels and trigger-points for notifying us of any changes that the scheme provider considers to be prudent for their scheme, including their reasons for this. As a minimum, we expect this to include changes to current or planned:
    1. membership numbers
    2. classes and proportions of scheme assets
    3. future income from participating employers
    4. changes to support available from the scheme proprietor
49. We also need to be assured there are sufficient processes within a scheme’s systems and processes to identify and appropriately address significant events.
50. If we are not satisfied that the arrangements for notifying us are adequate, we may not be satisfied that the scheme meets the authorisation criterion for the business plan to be sound.

Submitting a revised business plan

51. Whenever a revised business plan is submitted to us, any changes and revisions must be highlighted. Where milestones, objectives or outcomes have altered we will require an updated commentary from the scheme proprietor outlining the impact and consequences of the changes. Any commentary may also contain additional comment from the trustees.
52. Where a revised business plan is delayed by concerns raised by the scheme proprietor or trustees, we should be notified of the delay and the issues leading to the delay. If the issues cannot be resolved, this may affect our view of whether the scheme continues to satisfy the criteria to be authorised.

Scheme accounts

53. Trustees of multi-employer CDC schemes must send us the scheme’s annual accounts no later than two months after they are obtained by the trustees⁸.

Legal references

¹ Sections 8 and 14A(6) and paragraph 26(a) of Schedule 1B to the Pension Schemes Act 2021

² Section 14A(1) of the Pension Schemes Act 2021

³ Paragraph 5 of Schedule 1B of the 2025 Regulations

⁴ Schedule 1B to the Pension Schemes Act 2021

⁵ Chapter 2 of Part 4 of the Finance Act 2004

⁶ Section 14A (6)(c) of the Pension Schemes Act 2021

⁷ Section 14A(2) and Paragraph 4 of Schedule 1B to the Pension Schemes Act 2021

⁸ Section 26A of the Pension Schemes Act 2021

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