One in six (16 per cent) employers have likely never reviewed their workplace pension scheme to ensure it offers value for money, with 11 per cent stating this outright and 5 per cent admitting they did not know, according to research by Everywhen.

By contrast, 48 per cent of employers said they had reviewed their scheme with value for money in mind within the past 12 months, while 36 per cent had done so within the last three years.

This comes as the industry looks ahead to the introduction of the value for money framework, which aims to provide a more consistent assessment of defined contribution (DC) arrangements across investment performance, costs and charges, and service quality.

However, with the changes set to be introduced from 2028, Everywhen said employers should meanwhile develop their own measures for assessing pension value for money, considering factors such as costs, charges and investment performance.

The firm added that value for money should go further in its analysis to include factors such as member engagement, depending on employers’ objectives.

Commenting on the findings, Everywhen client director, Sorangi Shah, said: “It is unsettling to know that there are so many pension schemes that have never been reviewed to ensure they offer good value.

“A pension scheme appraisal should take place at least every three years and it is vital that this covers many aspects of review, including costs.”

The research also asked employers about the main factors influencing their choice when setting up the workplace scheme.

Costs and charges and the pension provider's brand reputation were the most cited factors, each selected by 31 per cent of respondents.

Ease of setup and ongoing management was chosen by 27 per cent, while investment options, and payroll and HR integration, were both cited by 23 per cent.

Shah said: “It is very positive to see that employers are not just basing their pension decisions on costs alone. The research results are consistent with our experiences at Everywhen – which show that a pension provider’s brand reputation is equally important.

“It is understandable that provider repute is in sharp focus when money is being saved over several decades. There are, however, some less well-known providers around too, and financial advisers will be able to assist with making the right choice for the individual company and its employees.”

Shah added that employers are showing a “balanced approach” to what influences their scheme choice.

“Investment options are clearly and rightly a significant matter. Ease of set up and ongoing management is also important for employers, as they have more systems and data to manage, with additional connectivity and integration becoming vital.”

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