EXCLUSIVE: The price of funds is the most important considerations for employers when selecting a pension provider for a contract-based pension scheme, according to exclusive research conducted for Employee Benefits by Booz & Co.
The Employee Benefits/Booz & Co Default funds survey, which polled 225 employers, found that 84% of respondents rate the price of funds as the top consideration. Other priorities when selecting a provider include: ongoing administration (70%), fund range (61%), the default funds on offer (46%), employee communications (46%) and support for auto-enrolment (38%).
It also found that 67% of respondents with trust-based pension schemes review default fund performance at least annually, while 42% of respondents with contract-based schemes do the same.
A third (32%) of respondents with contract-based pension schemes and 16% of those with trust-based schemes have not reviewed default fund performance since it was first selected.
The research also found:
- 79% of respondents use an adviser when selecting a pension provider.
- 38% of respondents said their adviser proactively suggested changes to the default fund.
- 42% of respondents said it is not that important for the pension provider to offer retirement solutions, while 33% felt this is important.
- When it comes to retirement options, 33% of respondents offer employees advice about the open market option, while 22% offer income drawdown, 19% offer a compulsory-purchase annuiy, 17% offer an impaired-life annuity, and 10% offer a with-profits annuity.