The most common primary pension scheme offered by employers is a group personal pension (GPP), as offered by more than a third (39%) of respondents, according to research by Employee Benefits.
The Employee Benefits Pensions research 2020, which surveyed 94 pension strategy decision-makers found that a GPP has held the top spot since 2005, and once again, the large gap between this and the second most popular plan, a trust-based defined contribution (DC) scheme (18%), demonstrates its popularity.
This year’s survey shows that master trusts have fallen in popularity slightly (6%) and have been overtaken by trust-based schemes, group self-invested personal pensions (10%), and stakeholder plans (7%). Many respondents (55%) only operate one pension plan for employees, but for those that have a secondary one in place, the most common is a final salary defined benefit (DB) scheme, closed to new members (14%). After this, a GPP is the next most popular secondary pension plan, offered by 8% of respondents.
The majority of respondents that offer a DB pension as a secondary scheme (30%) are currently reviewing their plan, but are unsure about what will happen with it. A quarter of these respondents (25%) also said they have no plans to make changes to the scheme or how it is managed.
However, some employers do have plans in place for their DB schemes; 25% are planning to keep it open for future accrual, but closed to new entrants, while 15% said they plan to keep it open to new entrants and to future accrual.
Over the years, the number of respondents that offer a secondary pension plan has increased: in 2016, just 18% offered a primary and secondary plan, but in in 2018 and 2017, a third offered both (36% and 35% respectively), while in 2019 this figure stood at 57%.
Download the Employee Benefits Pensions research 2020