Pension scheme governance is how a workplace pension is run, checked and kept on track. For an employer, it covers two things. The first is meeting your legal duties under auto enrolment. The second is making sure the scheme you chose is still doing a good job for your staff. The first is required by law. The second isn’t, but it holds up real value.
Pension scheme governance is a term that comes up a lot in conversations with employers, usually because nobody has explained what it means for them. Here’s what it covers, what you’re responsible for, and what’s changing.
Who is responsible for running a workplace pension?
That depends on the type of scheme you have.
Trust-based schemes, including master trusts such as NEST, are run by a board of trustees. The trustees are responsible for how the scheme is managed and invested, and they’re overseen by The Pensions Regulator.
Contract-based schemes, usually called group personal pensions, are run by the pension provider. Since April 2015, rules from the FCA have required providers of these schemes to set up Independent Governance Committees, which check whether the schemes give members value for money and can challenge the provider’s board where they don’t.
Either way, you’re not usually the one running the scheme day to day. You do still have responsibilities, and some of them are legal duties.
What are an employer’s legal duties?
Under auto enrolment, every employer has to:
- Choose a qualifying workplace pension scheme
- Enrol eligible staff and write to them to explain what you’ve done
- Pay contributions into the scheme on time, which means by the 22nd of the month after you deducted them (or the 19th if you pay by cheque) Does any business still pay pension contributions by cheque? None of our clients do.
- Submit a declaration of compliance to The Pensions Regulator within five months of your duties start date
- Re-enrol eligible staff every three years and submit a re-declaration of compliance
- Keep records of how you’ve met your duties
According to The Pensions Regulator, the re-declaration is due within five months of the third anniversary of your duties start date, and you have to complete it even if there’s nobody to put back into the scheme. Records generally need to be kept for six years, although opt-out requests only need to be kept for four, as set out by The Pensions Regulator.
You can ask your payroll provider or adviser to handle parts of this, but the legal responsibility stays with you. If you want to check where you stand, our auto enrolment compliance checklist walks through each step, and we’ve also covered what happens if you get auto enrolment wrong.
Why governance is about more than compliance
A compliant scheme isn’t necessarily a good one. You can meet every legal duty and still have staff saving into a scheme with high charges, a poorly performing default fund or slow member service.
This is common among businesses that set up their pension when auto enrolment first arrived. The employer duties began in July 2012 and were phased in over several years, and many employers picked a scheme quickly to meet their deadline and haven’t looked at it since. A scheme that suited ten employees may not suit fifty, and the market has changed a lot since then.
If you’re in that position, it’s worth comparing NEST with other providers, or reading about moving away from NEST if you’ve outgrown it. It’s also worth checking how your pension contributions are made, as the method you use affects how much tax relief your staff receive.
What is changing under the Pension Schemes Act 2026?
The Pension Schemes Act 2026 received Royal Assent on 29 April 2026. One of its biggest changes for employers is a new statutory Value for Money framework. As Royal London explains, this looks beyond charges to judge workplace pensions on investment performance, service quality and outcomes for members too.
The framework is being introduced in stages. Larger schemes will go first, and the framework will then be extended to all workplace pensions from 2029, according to the CIPP. The new assessments are expected to begin in 2028.
For employers, this means two things. You’ll have clearer, comparable information about how your scheme performs, which makes reviewing it easier. The government also wants fewer, larger pension schemes, so some providers may merge, change or close, and the CIPP has flagged possible provider changes as something employers should prepare for. Knowing your scheme well now puts you in a much better position if you need to make a decision later.
What does good pension governance look like for an employer?
There’s no single required format, but employers who manage their pension well tend to do the same few things:
- Review the scheme at least once a year. Look at charges, how the default fund has performed and how well the provider handles queries from you and your staff.
- Keep a record of decisions. Note why you chose the scheme, when you last reviewed it and what you concluded. If anything is ever questioned, this shows you acted with your employees’ interests in mind.
- Check your contribution data. Payroll errors are easy to make and harder to fix the longer they go unnoticed.
- Diary your deadlines. Re-enrolment and re-declaration come round every three years, and they’re easy to forget in between.
- Explain the scheme to your staff. A pension only works as a benefit if people understand it. Our guide on communicating benefits to employees covers how to do this well.
Larger employers often set up a small pensions governance committee, typically someone from HR, someone from finance and an adviser, which meets once or twice a year to work through these points.
Do you need an adviser for pension governance?
You don’t legally need one. But most employers don’t have the time to benchmark their scheme against the market, keep track of new legislation and prepare a review every year.
An independent adviser can do that for you. Because we aren’t tied to any provider, our recommendations are based on what’s right for your business and your staff. Our workplace pension services cover everything from sourcing a scheme to regular reviews, and our staff education services help your employees get the most from it.
Frequently asked questions
Is pension governance a legal requirement for employers?
The auto enrolment duties are a legal requirement. These include enrolling staff, paying contributions on time, declaring compliance and keeping records. Reviewing whether your scheme gives good value isn’t a legal duty for most employers, but it is good practice.
Who is responsible for governance in a group personal pension?
The provider runs the scheme, and an Independent Governance Committee checks it gives members value for money. As the employer, you’re still responsible for your auto enrolment duties and for choosing the scheme.
How often should a workplace pension be reviewed?
Once a year is a sensible minimum. It’s also worth reviewing the scheme whenever your business changes significantly, for example after rapid growth or a merger.
Not sure when your scheme was last reviewed? Book your free benefits review and we’ll look at your current pension arrangements at no cost or obligation.
