What are white-labelled pension funds?

The white labelling of pension funds is becoming more popular as employers take on more pension responsibilities


  • White-labelled pension funds are growing in popularity as employers face more pension responsibilities.
  • A white-labelled fund allows an employer to make changes without extensive employee communication.
  • White-labelling can bring an element of future-proofing because employers are not tied to a single investment manager.


Pension fund white-labelling is gaining popularity among employers as they face greater scrutiny by industry regulators about their fund choices.

A white-labelled pension fund is an unbranded fund set up at the request of an employer or scheme trustee. It allows the employer or trustee to make changes to the fund without needing to amend scheme literature or employee communications. A white-labelled fund can be given any name the employer chooses, for example the UK equity fund, but the name of the fund manager, or managers, is effectively hidden.

This means an employer with a white labelled UK equity fund that wants to change to another UK equity fund with a different investment manager can do so fairly easily.

Paul Macro, head of defined contribution (DC), retirement at Mercer, says: “The trustees have a lot more flexibility. They can change the underlying investments without changing the communication materials because it has its own name, without the administrator saying ‘this is going to be a big job for us because we have to change every member’s record’. So trustees have more freedom and ability to change the investments as they see fit.”

Martin Palmer, head of corporate benefits marketing at Friends Life, says: “It gives the investment advisers more flexibility to change without having to go through a massive communication exercise. From an employer’s point of view, that is good because it can make the fund a bit more bespoke rather than it being a mainstream fund that the provider offers to all employers.”

More descriptive name

A white-labelled fund can also be given a more descriptive name to give staff a better idea of its nature. Examples include ‘the aggressive fund’ or ‘the cautious fund’.

Macro adds: “If employers can describe it in a relatively simple fashion, then members are more likely to be engaged and make active choices, or at least not be quite so scared of some of the options they have.”

The scheme administrator would then create a unit price for the fund. The name and unit price will stay the same, even if the employer wants to move the fund from one investment manager to another. “You don’t need to have a big administration change,” says Macro. “There may be some transaction costs in buying and selling the underlying units, but that is a lot smaller than the admin costs.”

But it is important that employers do not make fundamental changes without first informing staff. For example, an employer should avoid switching the assets of its default fund, which started as cash bonds, to emerging markets six months later without informing employees. Palmer says: “Employers need to ensure the fund is not changing dramatically, or if it is, that they have informed employees so they can take any action if necessary.”

White-labelled funds have been around for a number of years, but they have attracted more interest from employers with the arrival of auto-enrolment as employers strive to meet their regulatory responsibilities. These include selecting pension funds that serve to maximise employees’ retirement savings based on appropriate risk profiles.

Macro adds: “A white-labelled fund effectively gives an element of future-proofing. Employers can keep the headlines in the [scheme] booklet, but can change the investment manager as they see fit. They are inevitably going to want to do that because one single investment manager may not be the best for all time.”