There are many factors by which it is possible to measure a workplace pension provider, from quality of service, through to investment choices and member engagement. In this series of insights, we look at some of the key factors which should be considered when evaluating what makes a good workplace pension and what helps delivers the best outcomes for members.
Online access and digital engagement
How providers engage and communicate with their members can be additional hallmarks of a good workplace pension provider.
In a previous insight we looked in detail at how pension scheme members increasingly want to engage with their finances via mobile applications and online portals.
All workplace pension providers currently offer a transactional member portal.
Most also offer access via a mobile application. Aegon Workplace ARC is the only provider who does not currently offer any app. The majority of these apps (74%) are transactional to some extent. Only five providers offer read only apps.
Video content is also popular with many pension fund members. Our data shows that half of workplace pension providers support/offer personalised video pension statements. However, Aviva My Money and Aviva My Money Master Trust charge for this service, where eight other providers do not.
Administration and servicing
Many workplace pension members, their employers and advisers may change their view dramatically on whether a workplace pension is a good one dependent on the service they receive at key points or if they have a problem.
A workplace pension can offer all the right investment choices, have good governance, and offer all the shiniest new online platform. But if they do not offer the right support and assistance, how and when it is required, the adviser, employer and/or member may say it is the very worst of workplace pensions.
Our data shows that all workplace pension providers have dedicated staff who continue to have the ongoing day to day relationship with clients.
When it comes to supporting key points in the life of a workplace pension policy, providers offer dedicated teams for different services. Some teams offer support to adviser and employer, others to employer and member, and others to all parties. This differs between providers:
What else is offered alongside a pension?
Since the advent of open banking, consumers are increasingly looking to manage their finances across as few platforms as possible. Therefore, for some members the inclusion of other benefits within a workplace pension platform can be an important element when it comes to considering what a good workplace pension looks like.
Having a pension is great and highly advised, but employers are wanting to offer their staff more these days. Is just offering a pension enough?
There is a considerable amount of differentiation between workplace pension providers when it comes to offering additional products.
Workplace savings products are a popular option with 85% of workplace pension providers offering them. The most popular is guaranteed investment accounts, offered by 80% of providers. Workplace ISAs are also common with 75% of providers offering them. LISAs are however only offered by Hargreaves Lansdown.
Just under half (40%) of providers offer a flexible benefits platform/scheme. The providers who offer this are Aviva Designer, Aviva My Money, Aviva My Money Master Trust, Hargreaves Lansdown, Mercer Master Trust Aviva, Mercer Master Trust Scottish Widows, Standard Life and Standard Life DC Master Trust.
The Coronavirus pandemic has exacerbated the financial, physical, mental and social problems of many workplace pension members, making wellness propositions an increasing priority for many employers.
Our data shows that other than True Potential all workplace pension providers offer a wellness functionality as part of their proposition. Financial wellness is the most popular and is offered by all the propositions. The least frequently offered is social wellness, a social wellness service is only offered by 45% of workplace pension providers.
We are currently in the process of creating out first ever standalone Financial Wellness ratings. As part of this exercise we have expanded our financial wellness question set and results will be published on Benefits Guru next month.
Costs and charges are also an important factor to consider when looking at what constitutes a good workplace pension.
At Benefits Guru we do not explore explicit provider charging algorithms, as we believe that these are commercially sensitive. However, we do capture details of providers’ standard charging which includes the Annual Management Charge, set up costs, employer/employee fee and any exit fee’s.
Further detail of these will be covered in a future insight article in the coming weeks.
So what does make a good workplace pension?
When it comes to considering what constitutes a good workplace pension there is no simple answer, more of a “horses for courses” situation. In this series of insights we have looked at a number of factors which are commonly sighted as being important, however, we not saying these are the only elements which should be considered.
Whilst one employer may consider investment choices and charges to be the most important elements for their members, another may consider additional benefits and wellness services to be important for theirs.
Therefore, when evaluating a provider it is important for employers and advisers that they have a strong understanding of the priorities of their members before asking the question as to what a good workplace pension looks like for them.
Our Workplace Pension ratings provide a good overview of some of the key areas which might be considered (https://benefitsguru.co.uk/2020-workplace-pension-ratings) but each employer will have a different view of what is good or bad for their workforce.