10 October 2025
Festina Finance, a leading European provider of pension administration technology, has urged UK schemes and administrators to act now to prepare their systems for upcoming Collective Defined Contribution (CDC) pension reform.
It will be possible for unconnected multi-employer CDC schemes to gain regulatory approval in 2026 and begin accepting contributions in 2027. Schemes must upgrade their technology and operational capabilities if they wish to participate and remain compliant and competitive.
Dan McLaughlin, UK Country Head at Festina Finance, commented: “CDC schemes are coming. We may not know exactly what form they will take, but they are coming, and providers need to be prepared, and this in introduces significant complexity for technology.
“CDC occupies a new space and requires a fundamental rethink of how we track, calculate, and communicate benefits on a collective and dynamic basis.”
McLaughlin added: “It’s a mistake to think that CDC administration can be based on reheated DB systems. There are significant differences as CDC pensions demand real-time tracking of collective fund performance and dynamic income adjustments based on actuarial modelling. This presents a unique challenge for administrators, who must:
“CDC isn’t just another scheme type, that a systems upgrade will solve. It is a strategic shift that will require purpose-built solutions and fundamentally different tooling.”
McLaughlin concluded: “Despite the complexity, this presents a huge opportunity. CDC offers a scalable opportunity to potentially offer more stable retirement incomes without reverting to the high cost of DB provision. The technology uplift is real, but the prize is worth it.”
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