We at Pensions Mutual tip our hats off to Arboreum.

Working towards authorisation is what both challengers are doing and we wish them well as I hope they wish us well!

Here is how they introduce themselves to employers who want a CDC workplace pension

Arboreum or Collective Pensions? – Both actually!

For those like me , who want to get the naming right, Here is the “who owns who!

Arboreum is wholly owned by Collective Pensions, which is itself majority owned by Vestey Holdings and Timpson, two of the UK’s most respected family businesses. Each has taken a stake because they believe a CDC pension scheme could offer a better way to save for retirement, and they want to help build one.

Who are the people who run Arboreum?

As mentioned above!

What does their press release say? (from Professional Pensions)

Arboreum managing director Adrian Boulding said the proposition is targeting a membership of 500,000 by the end of 2032 – with Vestey and Timpson expected to be among the initial employers taking part in the new scheme.

The launch comes as regulations enabling the launch of unconnected multi-employer CDC schemes came into force on 31 July – expanding the UK’s CDC framework beyond single or connected employers.

Arboreum said the scheme would offer a new approach between traditional defined contribution (DC) schemes, where individuals carry most risks, and defined benefit (DB) schemes, where employers promise a guaranteed level of pension.

Boulding said Arboreum was particularly targeting firms that had closed DB schemes, moved to a DC alternative and possibly now regretted no longer offering their employees an income for life.

He explained:

“For too long, employees have faced a choice between DC schemes that place most of the risk on individuals and DB pensions that are increasingly unavailable in the private sector. We’ve created a different way forward bringing people together in a collective, CDC, arrangement. With this new scheme, we aim to provide a target-based income for life and help more workers achieve better retirement outcomes.

Hymans Robertson has supported Arboreum with actuarial advice on scheme design and the benefit specification, with senior partner Jon Hatchett acting as scheme actuary. CMS has supported on legal matters.

Commenting on the launch, Hymans Robertson partner Paul Waters said:

“The launch of Arboreum is an important milestone for the development of CDC pensions in the UK. For many employers, there’s been a gap between what is offered by DB schemes with a certainty of benefits yet uncertain employer cost of DB pensions and the individual responsibility placed on members in DC schemes.

“CDC offers a different approach. It enables members to share risks collectively and benefit from a long-term investment strategy focused on delivering sustainable retirement incomes. This model has the potential to improve member outcomes as well as broaden access to high-quality workplace pension provision.”

Arboreum have a number of appointments that will be made “soon”

Boulding said Arboreum was currently in the process of appointing trustees to the scheme – noting it was looking to have a balance of people with an understanding of family businesses along with those experienced in the professional trustee marketplace. It said it hoped to announce the board over the coming weeks.

The firm said it was also currently finalising the process of appointing an administrator and investment providers.

Boulding said the scheme wanted a mix of what he called “conventional assets”, such as quoted equities, alongside a smaller allocation to UK productive assets – noting such investment in the UK would support “the next generation of UK workers, as they are going to be the ones providing the goods and services for our UK-based retirees”.

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One of three in 2027 with one to follow in 2028