Employer support (single-employer CDC schemes only)

CDC code in force: 31 July 2026

1. There may be situations where an employer puts in place a contract guaranteeing the trustees access to sufficient funds or a suitable financial vehicle (such as an insurance contract) or contract guaranteeing the trustees access to sufficient funds to run the scheme and/or to replace the scheme’s need for financial reserves. Any such support will need to ringfence and guarantee the necessary resources for the financial sustainability of the scheme¹.
2. Financial reserves are not required where there are legally enforceable commitments or guarantees in place from employers or group companies to cover the costs arising from a triggering event.
3. We will expect to see evidence that the trustees have first call on the necessary support and the guarantor can provide it².

Information about the employer (single-employer CDC schemes only)

4. Where a participating employer has agreed to provide support for the ongoing costs of the scheme or provide some, or all, of the required financial resources, trustees may be required to provide financial information about the employer³.
5. In addition, we are more likely to be satisfied that this criterion is met if trustees provide:
   1. any additional information that we ask for to be satisfied that the employer or group can provide adequate financial support to the scheme
   2. any further evidence that supports an application
6. We are not obliged to consider evidence that we have not asked for, but we will not reject it unreasonably.
7. Where the supporting employer is part of a corporate group, the financial information must be provided at a level appropriate to the employer’s position in the group⁴. We may also ask for information about other group companies if we feel their operations or liabilities may affect the scheme or limit the ability of the employer to support it.
8. We do not require this financial information where an employer’s only commitment is to pay contributions for the members it employs.
9. A scheme may be supported by more than one employer. We will consider the financial position of each employer that we consider relevant⁵. We may choose to accept a case made by the trustees that stronger employers can absorb more potential costs. We will require evidence of the legal enforceability of a debt on any such employer.

Accounts

10. We will consider whether the employer is able to support the scheme where:
    1. the auditor expresses a qualified or adverse opinion or disclaims their opinion on any supporting employer’s financial statements
    2. the auditor’s report contains a material uncertainty related to a going concern paragraph or an emphasis of matter we consider to be significant or relevant
11. Any supporting employer should disclose any reliance on third party financial support. We may need to see the accounts of any such third party.

Legal references

¹ Section 14(2) of the Pension Schemes Act 2021 and Paragraph 4 of Schedule 3 to the 2022 Regulations

² Paragraph 4(b) of Schedule 3 to the 2022 Regulations

³ Paragraph 1(a)(vii) of Schedule 3 to the 2022 Regulations

⁴ Paragraph 1(a)(vii) of Schedule 3 to the 2022 Regulations

⁵ Paragraphs 2(f) and 3(e) of Schedule 3 to the 2022 Regulations

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