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The authorisation criteria

CDC code in force: 31 July 2026

  1. We will need to be satisfied that a CDC scheme meets all the authorisation criteria for it to be authorised and able to operate1. The authorisation criteria are broadly as follows2:

Fitness and propriety

  1. For all schemes, we are required to assess the person who establishes the scheme and the trustees, as well as those who can appoint or remove the trustees or amend or vary the trust deed or scheme rules.
  2. For multi-employer CDC schemes only, we are also required to assess3:
    1. the scheme proprietor
    2. any person who promotes or markets the scheme
    3. the chief financial officer
    4. the chief investment officer
  3. For multi-employer CDC schemes only, we may also assess any person that undertakes a ‘core function’, this being a strategic, executive or management role carried out in relation to or on behalf of a person we are required to assess when authorising a multi-employer CDC scheme4.
  4. When assessing any of the above persons, we must take into account any matters specified in legislation. We can also take into account any other matters we consider appropriate, including matters relating to ‘connected persons’5.
  5. All individuals assessed must be able to satisfy us that they are fit and proper because they meet the standards of honesty, integrity and knowledge appropriate to their role. We will also assess trustees’ competence and conduct.

Systems and processes

  1. The scheme must have sufficient IT systems in place to ensure it is run effectively and have robust governance processes to manage the scheme effectively and comply with all relevant requirements6. This code uses the term processes to mean policies, processes and procedures.

Member communications

  1. The scheme must have adequate systems and processes to communicate with members and others in accordance with regulations7 so they understand the risks and benefits of the scheme, particularly how the rate or amount of benefits may change.

Continuity strategy

  1. The scheme must have an adequate continuity strategy8 for how members will be protected if there is a triggering event. A continuity strategy setting out how members will be protected must be prepared by the trustees (single-employer CDC schemes) or the scheme proprietor (multi-employer CDC schemes).

Financial sustainability

  1. A scheme must have sufficient financial resources to operate at set-up and on a day-to-day basis, and following a triggering event, without increasing the cost to members. Multi-employer CDC schemes must have a sound business strategy evidenced by a business plan9.

Sound scheme design

  1. A scheme must have a sound scheme design10. This should be demonstrated in the viability report. It should also be supported by evidence, including appropriate advice from suitably qualified professionals and modelling and testing appropriate to a scheme’s complexity.

(For multi-employer CDC schemes only) Promotion and marketing

  1. Trustees are prohibited from carrying out any promotion or marketing of the scheme11. A scheme must have adequate systems and processes in place to ensure any promotional or marketing material is clear and not misleading12. If a person has carried out promotion or marketing of the scheme that is unclear, misleading or both, these must have been rectified.

(For multi-employer CDC schemes only) Scheme proprietor

  1. The scheme must have a single scheme proprietor, which must be a body corporate or a partnership that is a legal person under the law by which it is governed. This proprietor must not be a trustee of the scheme. The scheme proprietor must be liable for providing funds for some or all of the costs of setting up and running the scheme, and for making business decisions relating to the commercial activities of the scheme (if any)13.

Interconnectivity between criteria

  1. There are strong links between all the authorisation criteria, and they cannot be assessed in isolation. For example, we could not approve the fitness and propriety criterion if we were not confident that trustees were competent to assess the scheme actuary’s analysis of whether the scheme’s design is sound (sound scheme design criterion), or whether it is being communicated appropriately to members (promotion and marketing criterion).

Legal references

1 Section 9(1) of the Pension Schemes Act 2021

2 Section 9(3) of the Pension Schemes Act 2021

3 Section 11(2) of the Pension Schemes Act 2021

4 Regulations 31(3) and (4) of the 2025 Regulations

5 Section 11(3) of the Pension Schemes Act 2021

6 Section 9(3) and Section 16 of the Pension Schemes Act 2021 and Paragraph 7 of Schedule 5 of the 2025 Regulations

7 Section 15 of the Pension Schemes Act 2021 and Regulation 13 and Schedule 4 to the 2022 Regulations and Regulation 36 and Schedule 5 of the 2025 Regulations

8 Regulation 15 of the 2021 Regulations, Regulations 38 and 39 of the 2025 Regulations, and Section 9(3)(f) and Section 17(1) of the Pension Schemes Act 2021

9 Section 9(3)(c) and Section 14A of the Pension Schemes Act 2021

10 Regulation 9 and Part 1 of Schedule 2 of the 2022 Regulations, Regulation 32 and Part 1 of Schedule 2 of the 2025 Regulations, and Section 9(3)(b) and Section 12 of the Pension Schemes Act 2021

11 Section 9(3)(cc) of the Pension Schemes Act 2021

12 Section 9(3)(cb)(i) and Section 14D and Part 1 of Schedule 1C to the Pension Schemes Act 2021

13 Section 9(3)(ca) and Section 14B and Section 14C of the Pension Schemes Act 2021

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