The Pensions Regulator

Employer engagement

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Employer engagement activities

Employer engagement activities

You can choose which activities you would like to be undertaken. The activities can be divided into three broad categories:

• member concerns;
• HR – employer issues; and
• monitoring services.

Examples include:

Member concerns

• improving member understanding and engagement, especially in relation to decisions on investment choices and retirement options;
• enhancing communications to members - prospective members, active members, occasionally deferred members and any groups of members that may have special needs;
• the governance mechanism can provide a point of contact for members – through which members may raise issues regarding the scheme;
• providing additional support to members – arranging work-place presentations by the adviser or provider and one-to-one advice by the adviser.

As the policy is in the member’s name (not that of the employer), this points to a need for greater engagement by members in GPP arrangements than trust-based schemes.

This suggests a need for more emphasis on member understanding in GPPs, especially where these offer more choice and complexity than a trust-based scheme. Employees can be encouraged to take more interest in their pension and, where appropriate, to take independent financial advice. 

HR – Employer issues

• considering the aim of the scheme, for example, to provide target income replacement level or to provide benefits comparable to competitors to attract and retain staff;
• determining contribution rates/adequacy of benefits;
• take-up (or enrolment) rates;
• numbers of joiners and leavers;
• administration of the deduction and payment of contributions;
• age discrimination issues;
• discussions concerning continuing suitability of the scheme

Monitoring services

• selection and monitoring of provider, for example, meet providers and review their proposals/performance especially in the areas of administration and investment performance;
• reviewing costs/charges of service providers and the services provided;
• numbers of members selecting, and amounts invested in, each fund to monitor investment choices made by members (eg, if many members were choosing specialist funds with a very high or very low risk profile, this may indicate a lack of member understanding and those involved in the scheme’s governance may decide to review the scheme literature or request the provider/adviser to send an explanatory letter to the members).  

There are no statutory requirements on those employer and employee representatives involved in the governance of a GPP in relation to their knowledge and understanding, but members of the committee may wish to use relevant sections of our free e-learning programme, Trustee toolkit, particularly modules relating to DC and investment.

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