Over 20 UK employers have signed a pledge, sent to over 100 firms, to prioritise pension outcomes over cost when selecting and reviewing providers.
But the pledge has been snubbed by some of the employers. Corporate Adviser spoke to several in confidence who said they saw the pledge as unwanted interference in their role as sponsors of their scheme.
The Employer Pension Pledge, led by the Lord Mayor of London, Alastair King, calls on companies to prioritise long-term pension outcomes over low fees.
The pledge, separate from the Mansion House Compact and Accord that focus on pension providers investing in private markets, targets employers, encouraging them to play a more active role in improving pension value for their staff. It also supports upcoming Value for Money rules from the FCA and The Pensions Regulator.
Signatories include Aviva, BT, Tesco, Legal & General, NatWest, Octopus Energy, Phoenix Group, and Standard Chartered.
Lord Mayor of London Alastair King says: “Employers have always played a decisive, if underappreciated, role in shaping retirement outcomes. This Pledge is about making that role visible, responsible, and focused on value. The Pledge harnesses the convening power of the City of London Corporation in support of growth and shared prosperity across the United Kingdom. I am grateful to the major employers who have helped lay the foundations of the Pledge. In the months ahead, I look forward to welcoming many more organisations – large and small – to join the existing signatories. This is an example of the mayoralty working across the entire pension investment value chain to deliver better outcomes for savers.”
Chancellor of the Exchequer Rachel Reeves says: “We welcome this commitment from major employers to boost returns for their employees.
“To support this, we are creating pension megafunds to unlock more investment and boost people’s pension pots, going further and faster to drive growth as part of our Plan for Change to put more money into people’s pockets.”
Minister for Pensions Torsten Bell says: “Workers rightly want their pension savings to work harder for them – ensuring they get the maximum bang for every buck saved.
“It is normally employers, not employees, who choose which pension scheme workers are invested in. So I welcome this pledge to encourage employers to focus on what matters most to their workers: how fast pension pots grow.”
Schroders Group chief executive Richard Oldfield says: “For too long now, the majority of defined contribution pension schemes have been focused on costs rather than delivering the best possible returns for savers and, ultimately, retirees.
“A greater focus on value for money and long-term investment outcomes is a strong step in the right direction. Furthermore, these proposals should help unlock capital to invest in private markets, such as infrastructure, benefitting savers and the wider economy.”
L&G group chief executive officer António Simões says: “As one of the UK’s largest pension providers we are proud to be among the signatories of the City of London Corporation’s Employer Pension Pledge. We fully support this initiative and its ambition to deliver better retirement outcomes for UK workers while unlocking the long-term potential of pension capital to drive economic growth.”
Aviva CEO Amanda Blanc says: “We’re proud to support the Employer Pension Pledge. As a major UK pension provider and employer, Aviva is committed to delivering the best possible outcomes for our customers and our people, including investing in UK assets—such as innovative, early-stage businesses—while ensuring excellent value.”
Canada Life UK chief people officer Nick Harding says: “At Canada Life UK, we are proud to support the financial wellbeing of our colleagues throughout their careers and into retirement. Signing the Employer Pension Pledge underscores our commitment to ensuring that the decisions we make about our workplace pension arrangements prioritise the long-term interests of our colleagues and ensures the scheme delivers value, so we can support our people in achieving a secure and sustainable retirement.”
TPT Retirement Solutions director of defined contribution Philip Smith says: “We wholeheartedly endorse the government’s efforts to get Britain saving smarter. Employers must champion net returns—not just cost—because what ultimately matters to employees is the value they retire on, and not the fees saved today. A low-cost scheme that benefits from limited oversight and delivers poor returns will just leave members worse off than one that’s slightly more expensive but that consistently grows their savings. This is also why employers should be demanding greater transparency from providers, especially when it comes to how funds are allocated across markets. Understanding where and how money is invested is key if companies want to assess long-term performance and improve on it.”
