How to choose a pension scheme

When you choose a pension scheme for your staff you must make sure it meets certain criteria. You should also choose a good quality scheme that provides value for money and protects your staff’s retirement savings.
If you have an existing scheme, you need to decide whether you continue to use it for existing and new members. You may need to choose a new scheme for some or all of your members.

On this page

• Key points
• If you don't have a pension scheme
• If you have a pension scheme
• Reviewing the quality of a new or existing scheme

Key points

• If you don’t have a pension scheme that you can use for automatic enrolment, you will need to choose a new one.
• If you already have a pension scheme that you want to use for automatic enrolment, you need to check that you can use it.
• Your scheme must meet certain criteria and should be good quality.

If you don't have a pension scheme

If you don’t have a scheme, or you can’t use (or don’t want to use) your existing scheme, you must choose a new one.
Most employers are likely to use a defined contribution (DC) scheme for automatic enrolment. The most suitable DC scheme is likely to be a large scheme run by a specialist pension provider such as a group personal pension or master trust.
You should speak to scheme providers or a pension adviser.
You may be approached with offers to open a new trust-based scheme. This would involve your organisation providing a board of trustees to run the scheme and therefore would involve more cost, time and work for you as the employer.
Most employers will find that it is not cost-effective to set up this type of scheme unless it has at least 1,000 people saving in it.

If you have a pension scheme

You may already have a pension scheme, which you probably know as a stakeholder scheme, group personal pension or trust-based scheme.
If you want to continue using your scheme for existing members, you need to check that it meets certain qualifying criteria. If you also want to use your scheme to automatically enrol new members, it will need to meet some additional criteria.
You should also check that the scheme is good quality, for example it provides value for money and protects your staff’s savings. Contact your provider or trustees to check whether you can continue to use your scheme.
If your provider or trustees can’t demonstrate that the scheme meets the criteria and is good quality, you may be able to adapt it. You should also consider whether it would be better to choose a new scheme.

Reviewing the quality of a new or existing scheme

You should ask the provider or trustees whether the scheme includes our DC quality features. We’ve developed the DC quality features as a way for trustees and providers to assess whether their scheme is likely to deliver good retirement outcomes for members.
From: thepensionsregulator.gov.uk