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

Produced in partnership with Sharon Piert of CMS

Practice notes

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

Produced in partnership with Sharon Piert of CMS

Practice notes

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

Jurisdiction(s):

United Kingdom

Key definition:

Pension scheme definition

What does Pension scheme mean?

A pension scheme is a scheme or other arrangement which is comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of persons on retirement, on death, on having reached a particular age, on the onset of serious ill-health or incapacity or in similar circumstances.

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