The Pensions Regulator

Employer engagement

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Background

There are three main types of work place contract-based schemes:

• group personal pensions (GPPs);
• group self-invested personal pensions (group SIPPs); and
• group stakeholder pensions.

In this guidance we use the term GPP to cover all these types of arrangements. They all involve an individual contract between the provider and the member. The employer does not usually have any direct contractual relationship with the provider. As an employer, you would normally receive advice from an adviser, who may also be asked to advise employees. 

In recent years, there has been a marked increase in the number of employers of all sizes offering GPPs to their employees. Our discussion paper, 'The governance of work-based pension schemes' highlighted the governance issues in relation to GPPs. Paragraph 12.39 commented: "We believe there can be value in the employer having an ongoing role in reviewing the scheme. This can be achieved in several ways, and it is for employers to decide which suits them best and what level of employee involvement is required." 

The response to our consultation, 'How the regulator will promote better governance of work-based pension schemes', concluded that we should continue with the approach that the extent of voluntary employer engagement in GPPs is a matter for employers to decide on, and that we will provide guidance for employers' information.  

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