The majority of employers said they have not reviewed their workplace pension schemes in the last 12 months, according to new research by Towergate Employee Benefits.
The provider’s pensions experts surveyed 500 HR decision makers. It found that less than half (48%) of employer respondents admitted that they have reviewed their workplace pension scheme within the last 12 months to check if it offers value for money in terms of charges, default investment, proposition, and service.
A third (35%) said they last reviewed their workplace pension scheme to check it offers value for money within the last three years, 10% have never reviewed their workplace pension scheme, and 8% said they did not know when they last reviewed their scheme.
The research also found that only just over half (52%) of organisations have a pension governance structure in place, such as an internal pension committee, formal governance board, or external adviser.
Sorangi Shah, client director at Towergate Employee Benefits, said: “New regulations being proposed mean workplace pensions will need to demonstrably offer value for money; we’re surprised at how few employers have recently reviewed their pension scheme, and expect to see this figure increase, but it’s vital that any review encompasses the right criteria.
“Pension schemes are not only a statutory obligation but an invaluable part of the employee value proposition. Often pension costs can be a significant proportion of the employee benefits budget, therefore it is important they demonstrate value for money for employers and employees. A well-run pension scheme can be a huge asset to a company in terms of employee satisfaction, engagement and, therefore, recruitment and retention.”
The UK government and regulators have proposed new Value for Money regulations that will introduce a framework to assess workplace pensions in a unified approach across cost, performance and service. A red, amber and green rating system will be used to determine how scheme default investments perform and will be publicly disclosed to incentivise underperformers to improve, consolidate or leave the market. The regulation process is expected to take place in 2026/27, with the first data publication in 2028.
