As an employer, should I be reviewing our workplace pension?

Yes – here’s why now is the time.

For many employers, the workplace pension was something ticked off the compliance list when Automatic Enrolment was implemented in 2012. But many years have passed since the scheme was set up and in that time you as a business have probably changed significantly. The same way the workplace pension market has too.

If you’ve never reviewed your workplace pension scheme since it was implemented, you’re likely overlooking some important risks to your business and opportunities to improve employee outcomes. Please find below some examples of what other employers have found when reviewing their workplace pension for the first time in 8+ years.

The default investment may not be suitable or is performing poorly

When your scheme was first set up, a default investment fund was chosen, which at the time may have been appropriate when taking into consideration:

• Workforce demographic
• Legislation
• Investment strategies
• Workforce attitudes to pensions and investing

However, since introducing the default, the options available to members on accessing their pension has changed and so too, potentially, has their understanding or experience with investment returns.

Example: We recently supported a large manufacturing company who was using a default investment. This was labelled 'cautious' and was working on the basis that all members would purchase an annuity at retirement.

A review of the investment strategy led to switching to a default investment strategy that should improve outcomes for both younger staff and for those closer to retirement.

Your scheme member charge may no longer be competitive

Many schemes were set up when the business had fewer staff or less Assets Under Management (AUM), i.e. how much has been saved in your workplace pension scheme.

The workplace pension market is incredibly competitive, and this is reflected in the terms offered for employers with established schemes.

Example: We recently supported a large manufacturing company who was using a default investment. This was labelled 'cautious' and was working on the basis that all members would purchase an annuity at retirement.

Reducing the member charge will help to improve the value for money for members and help to achieve their future retirement through added-value services such as financial education sessions and digital engagement tools for employees – all at no extra cost to the employer.

Governance and compliance expectations have grown

The Pensions Regulator (TPR) expects employers to have oversight of their workplace pension, particularly if using a Group Personal Pension (GPP). While you're not a scheme trustee, you’re responsible for selecting and monitoring a suitable arrangement.

A scheme review ensures you're meeting those obligations and can demonstrate due diligence. Even more so if your business is preparing for a sale or audit or simply wants to manage its risk responsibly.

Final thoughts

A workplace pension can often be the most valuable benefit you offer. But like any other scheme, it needs frequent reviews to ensure it’s delivering value, aligned with your workforce and delivering good outcomes.

We’re here to help.

The information provided is for general guidance only and reflects our understanding of HMRC rules at the time of writing. It does not constitute legal, tax, or accounting advice. Employers should seek specific advice from their accountant or tax adviser to ensure the approach taken is appropriate for their circumstances.