87% of employers seeking pension provider review this year

Eighty-seven per cent of employers are looking to review their pension provider in the next 12 months, according to new research conducted by Smarterly.

The research – which considered the views of 250 HR professionals working in businesses with a workforce above 300 employees – showed 65% of respondents didn’t believe that pension providers are doing enough to offer new and progressive products.

Furthermore, 63% of employers wanted to see a new disrupter enter the pensions market, also suggesting that customer service levels from existing pensions providers had fallen significantly.

Smarterly head of proposition, Steve Watson, noted that pension legislation had changed ‘dramatically’ in recent years, which combined with financial pressures, had seen a move away from defined benefit schemes to defined contributions schemes.

“But the products themselves have remained the same and there is very little innovation the market,” Watson commented.

“With employers now legally obliged to enrol their employees into a pension scheme, existing providers are under very little pressure to innovate. They still seek to compete on cost, of course, but with a captive audience, providers see no need to design ground-breaking products or offer outstanding levels of service – they know that there is ample business out there to share around.”

“Employers are unhappy about the current status quo in the pensions market. Legacy providers are simply not doing enough to keep up with the new generation. The time is nigh for a new player in the market.”

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