Defaqto’s 2019 guide to analysing workplace pension default funds

Default workplace pensions are a relatively new product, yet we’re already starting to see significant differences in fund performances. The best yielding fund has produced 3.5 times the annualised return of the worst performer over the last three years.

Returns aside, there’s a host of competing factors to consider when selecting the right workplace pension scheme. Employers and advisers must compare criteria among dozens of funds.

Nest, the award-winning pension provider, have sponsored the third annual guide from Defaqto. It offers an in-depth assessment of workplace pension default funds and seeks to provide a comprehensive overview to help advisers review their scheme recommendations using factual evidence.

With recent statements from the Competition and Markets Authority (CMA), the role of advisers within the pensions industry is under current scrutiny. The CMA have highlighted the important function advisers must play in order to ensure a comfortable retirement for people. Although they identified potential problems in the industry, pensions schemes can only benefit from more diverse and impartial advice.

The annual Defaqto report helps advisers compare schemes on seven major areas:

  1. Governance and regulation
  2. Provider financial strength and/or capability
  3. Independent Governance Committees (IGCs), trustees and investment committees
  4. Investment management key factors
  5. Cost
  6. Investment and performance
  7. Benchmarking and evidencing ‘value for money’

It compares over 70 different schemes from 35 different providers, offering critical insight into the current pensions market.

Get the 2019 guide to workplace pensions default funds today.

View the report