How to compare workplace pension providers: a framework for structured recommendations
Comparing workplace pension providers for a workplace client involves looking beyond charges or product features. Advisers need a clear, repeatable process to assess providers against their workplace client’s objectives and record the evidence supporting the final recommendation.
A structured approach can help show that the comparison was objective, proportionate and supported by appropriate due diligence. It should outline the key considerations and why a specific provider was recommended.
This framework can be used for a new scheme, provider review or potential scheme switch.
How to compare workplace pension providers: at a glance
A structured comparison of workplace pension providers should help advisers:
- agree their workplace client's objectives and constraints
- set clear comparison criteria before gathering provider information
- assess overall value, including, costs, investments, service, governance and member experience
- use a consistent approach to review each provider
- record the evidence behind each comparison
- note any providers ruled out, assumptions made and factors that could affect the outcome of the review
- keep a complete record of the review and recommendation.
When should advisers compare workplace pension providers?
Advisers may need to compare workplace pension providers when a workplace client has:
- concerns about value for money
- governance and oversight requirements
- administration or payroll issues
- member engagement challenges
- investment proposition concerns
- salary exchange requirements.
Step 1
Define your workplace client’s objectives and constraints
Start by agreeing what your workplace client wants their pension scheme to achieve. This keeps the review focused on their needs rather than the features of a particular provider.
Aim to capture three to five objectives in plain English, such as:
- reducing admin and contribution errors
- improving payroll compatibility
- providing better value for employees
- improving governance oversight and reporting
- increasing employee engagement
- offering a default investment option that suits employees
- improving support for employees approaching retirement
- introducing or enhancing salary exchange
- reducing the time and resources needed to manage the scheme.
Next, identify factors that could affect provider suitability, such as:
- number of employees, earnings and location
- employee groups and eligibility requirements
- payroll software, data formats and pay frequencies
- existing salary exchange arrangements
- implementation deadlines
- available budget and employer costs
- data quality and availability
- whether investments or existing assets may need to be moved
- the level of support needed during and after implementation.
Consider these factors from the start of the review.
Client objectives statement template
Use this template to record your client's objectives, priorities and key considerations.
The client is reviewing their workplace pension because: [list the reason for the review]
Their main objectives are:
- [objective]
- [objective]
- [objective]
Key workforce considerations: [summarise relevant workforce considerations]
Factors that could affect the review are: [list payroll, resource, cost and timing considerations]
Success would look like: [describe the outcome(s) the client wants to achieve]
Agree the objectives statement with your client and keep it as part of your review record.
Step 2
Set the comparison criteria
Decide what you'll assess before gathering detailed provider information.
For each criterion you assess, make a note of the information reviewed, provider responses, any gaps and the reasons for your assessment.
Each criterion should:
- link to an objective, employee need or identified risk
- be clear enough to apply consistently across all providers
- identify the information needed for comparison
- separate essential requirements from desirable features
- focus on what matters to the client and their employees.
These areas can help you get started when comparing providers.
Charges and value
Look at overall value rather than focusing on just costs and charges.
Consider:
- member charges, including management and investment fees
- employer charges, including implementation fees and ongoing costs
- whether charges would differ between employee groups or investment choices
- the features of the pension scheme
- what support and services are available.
The cheapest provider won't necessarily be the best value. Think about what your client and their employees receive in return for the costs involved.
Governance and insight
Review how the pension scheme is governed and how your workplace client will monitor performance and key risks.
Assess:
- who's responsible for overseeing the scheme
- what reporting the employer receives and how often it’s provided
- what information is available to support ongoing scheme reviews.
Administration, payroll and service
Administration and payroll processes can have a big impact on how smoothly a pension scheme works.
Assess:
- employer support, including any named contacts
- service standards, and how issues and complaints are managed
- how joiners, leavers and contribution changes are processed
- how payroll data and contributions are checked
- support during implementation and the first payroll cycles.
Investments
Review the default investment strategy, as well as the options available for employees who want to choose how their pension savings are invested.
Consider:
- the aims of the default investment strategy
- who the default strategy is designed for
- how investment performance is monitored and reviewed
- the provider's approach to responsible investment
- the range of investment options available.
Employee experience and communications
Assess how easily employees can understand, access and manage their workplace pension.
Consider:
- how easy it is for employees to use online services and apps
- how information is explained at key stages, like joining and approaching retirement
- how members receive communications
- what education or guidance materials are available
- how employers are supported with employee engagement
- feedback, complaints and service reviews.
Security and resilience
Review how the provider protects scheme and employee data, reduces fraud risk and keeps service running during disruption.
Consider:
- the provider's financial strength
- how data is protected
- how cyber-attacks are prevented and managed
- plans for maintaining service during disruption
- how fraud is prevented
- any independent certifications, accreditations or assurance reports.
Certifications and accreditations can help support your assessment, but they shouldn't be considered in isolation.
Implementation and transition
A provider may seem like a good fit but still be difficult to switch to.
Consider:
- how they’ll implement the scheme and who’s responsible for each stage
- what support’s available during implementation
- how delays, issues and unexpected problems will be managed
- what checks will happen after implementation
- what options there are for transferring existing pensions to the new scheme
- what support will be available once the scheme is live.
Step 3
Score and compare workplace pension providers
A scorecard can help make your comparison process more consistent and easier to explain your recommendation.
It should support your judgement, not replace it.
How can I clearly score workplace pension providers?
A simple five-point scale can work well:
- Significant gaps - the provider doesn’t meet requirements or has not supplied credible evidence.
- Partly meets - the provider meets some requirements, but concerns or gaps remain.
- Meets - the provider meets the requirements with acceptable evidence.
- Exceeds - the provider exceeds requirements with acceptable evidence.
- Strong evidence of fit - the provider is well suited to the client's needs, supported by strong evidence.
Define what each score means before completing the assessment. For essential requirements, you may want to use a pass/fail assessment instead of a score.
A score is only useful when it’s supported by evidence.
Record:
- the information reviewed
- where it came from and when it was provided
- any assumptions made
- gaps in information or unanswered questions
- the reason for the score
- any actions needed before making a recommendation.
When can weightings help with scoring providers?
Weightings can help when some criteria matter more to the employer than others. Agree these before scoring providers.
Example
If a workplace client wants to reduce administration, you might weight the criteria like this:
- administration, payroll and service: 30%
- employee experience and communications: 20%
- charges and value: 15%
- governance and oversight: 15%
- investments: 10%
- implementation and transition: 10%
Provider comparison scorecard template
| Criteria | Requirement | Weight | Provider score | Evidence | Risks or gaps |
| Assessed criterion | Scheme requirement |
XX% | [1-5] | Evidence supporting the score | Details of any risks or gaps |
Step 4
Carry out provider due diligence
Use your agreed criteria to create a consistent set of questions for each shortlisted provider. Ask providers for evidence to support their answers and keep a record of any follow-up questions and responses.
Step 5
Document the recommendation and evidence
Your final recommendation should clearly explain why the preferred provider is the best fit for your workplace client’s needs.
Recommendation summary template
- Reason for the review - explain why the review was carried out.
- Client objectives - list the agreed objectives.
- Options considered - list the providers reviewed.
- Options excluded - record any providers excluded and why.
- Assessment approach - explain the criteria, scoring method, weightings and evidence used.
- Key findings - summarise the main findings.
- Recommended option – state the recommendation.
- Why this option is preferred – explain how it best meets your client’s objectives.
- Strengths and limitations – summarise the main strengths and highlight any limitations.
- Implementation plan – outline the next steps, responsibilities and timescales.
- Ongoing review – explain how performance will be monitored in future.
What if my client prioritises salary exchange?
If salary exchange is one of your workplace client’s main objectives, assess how each provider supports payroll integration, employee communications, implementation and ongoing administration.
For more information, read our guide to salary exchange.
Adviser due diligence checklist
Before making your final recommendation, check that you can answer yes to the following:
- Have the client's objectives and key requirements been agreed?
- Were the criteria set before providers were assessed?
- Were the same core questions asked of each provider?
- Is each assessment supported by evidence?
- Have any gaps in information or assumptions been recorded?
- Have charges been considered alongside overall value?
- Have employee needs and outcomes been considered?
- Have any conflicts of interest been disclosed and managed?
- Have excluded options and the reasons for key decisions been documented?
Frequently asked questions
Do advisers need to run a tender every time they compare providers?
Not always. The approach should be fair, proportionate and appropriate for the employer’s circumstances.
If you don’t run a full tender, record the approach taken, the providers considered and why the evidence was enough to support your recommendation.
How many workplace pension providers should be compared?
There’s no set number. Compare enough suitable providers to make a fair and objective assessment. Record how you created the shortlist, any filters applied and why any providers were excluded.
Should advisers always recommend the highest-scoring provider?
Not necessarily. A lower-scoring provider may still be the right option if scores are close, the evidence is limited or there are implementation concerns.
How can an adviser show that switching provider could improve outcomes?
Link the recommendation to clear objectives and evidence. This could include clearer member communications, stronger investment governance or improved overall value.
Disclaimer
The information provided is based on our current understanding of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Also it may not reflect the options available under a specific product which may not be as wide as legislations and regulations allow.
All references to taxation are based on our understanding of current taxation law and practice and may be affected by future changes in legislation and the individual circumstances of the investor.