Pension governance mistakes

"The Pensions Regulator’s visiting us,” the HR director on the other end of the line told me.

He sounded so agitated, he might as well have been talking about the devil incarnate. Clearly, this was not a welcome visit.

But as it turned out, he was right to worry.

When we audited this company’s workplace pension scheme, we discovered that a large number of employees had been wrongly categorised during auto-enrolment. This meant the company was non-compliant, and risked being hit with a very hefty fine.

It’s a common story. Because the Government gave such short deadlines for auto-enrolment, many schemes were set up in a rush, and of course consultants didn’t have any models of how auto-enrolment should work. 

It’s no exaggeration to say that we find similar mistakes every time we do an audit.

The biggest mistake

But the very biggest mistake this company made,  wasn’t when they implemented auto-enrolment. It was in the following years – when they let their pension scheme run with only minimal oversight, without ever going back to check whether it was set up correctly or how it was performing.

All their problems could easily have been avoided with one simple measure: holding regular governance meetings, where key stakeholders review the fundamentals of the scheme.

It’s no different to holding regular board meetings for your company, or regularly auditing your finances. Your workplace pension scheme needs to be closely supervised to make sure it is well-run. Dealing with issues on an ad hoc basis means you end up fire-fighting and making mistakes.

It’s not just to do with auto-enrolment. Pension regulations are constantly changing (for an industry with such a boring image, it’s certainly fast-moving!).

If you ever believe your scheme is finally fully compliant and can be left alone, you risk being caught out. 

Then there’s the performance of your scheme. We once reviewed a workplace pension scheme for a client that did not hold governance meetings, and found their existing provider was charging them much, much more than the market norm. 

They were shocked, because they’d spent a long time making sure they’d chosen well. But the provider hadn’t been ripping them off. In fact, it had been a very competitive rate when the scheme was put into place – five years earlier….

Value for money

With regular governance meetings, this could never have happened, because there would have been a safety mechanism in place to ensure the scheme was regularly reviewed, and that the company was getting value for money

Ultimately, we helped them reduce charges by 50% – saving tens of thousands over the lifetime of the scheme. 

Of course, any number of problems can bedevil your workplace pension scheme, from a lack of compliance and performance issues to low employee engagement and high numbers of opt-outs. Pension governance meetings are the reliable system you need to catch these issues early - saving your company blushes, money and potential legal trouble – and to safeguard yourself, as well.

So if you don’t hold pension governance meetings, or don’t hold them as often as you should, don’t wait any longer. 

The third anniversary of auto-enrolment is upon us , and that means companies that started early have re-enrolment coming up. Now is the perfect time to start. 



Posted by Steve Butler

Topics: Pension Governance


Ask The Experts

Want to get in touch?
Just fill out the form below and we will be in touch shortly.


Next Generation Savings

Changing Workplace Savings Behaviour for the Better



We provide consultancy services to employers and trustees on contract-based and trust-based schemes, including master trusts. Our proposition encompasses governance, investment, administration and communications.



Establishing and governing the ideal workplace pensions and savings for your employees can be complex and time consuming. That’s where we come in.


Engagement & Education

We use innovative communication channels and modern technologies to help educate, engage and inspire employees across a range of financial topics.


Find out more


With greater choice and freedom in how and when individuals are able to access their pension fund, there is now an even greater need for early education and advanced planning. Find out how we help.



Our investment research division analyses and rates over 18,000 DC investment funds. The insight we have enables us to support your investment objectives, making sure they're on track to deliver.


Health & Risk

Our health & risk service provides tailored combinations of cover and cost to exactly match each employer's requirements, helping you get best value for your benefits spend.