We reviewed how effectively Independent Governance committees (IGCs) and Governance Advisory Arrangements (GAAs) are improving the value for money of workplace pensions.
August 2025 update: This review is historical. See our what we publish[1] page for more information and current views.
IGCs are established by workplace personal pension providers and give important, independent oversight, making sure the provider’s workplace personal pension schemes offer value for money to consumers.
Protecting the interests of workplace personal pension scheme members is one of our priorities. In this review, we looked closely at:
- how IGCs and GAAs have improved value for money for workplace pension scheme members
- the outcomes for members, including the average charges of policies
- whether IGCs were well-structured and resourced, with the right processes to act effectively in members’ interests
Who this applies to
Our findings will be of interest to all workplace personal pension providers and IGC chairs, as well as GAAs. Consumer groups, charities, trade bodies and organisations dealing with workplace personal pensions including those with an interest in the ageing population, may also be interested.
Our scope
The Government introduced pension auto-enrolment in 2012. Members of workplace personal pension schemes cannot generally choose which firm provides their pension scheme, and many do not make a personal decision about the investment fund(s) where their contributions are placed. In 2015, the Office of Fair Trading (OFT) found that the market for workplace pensions lacked competition on charges and quality, due to demand-side weaknesses and the complexity of charges.
Our review assessed how far IGCs and GAAs have been able to improve the value for money for members invested in workplace personal pension schemes. We looked at the outcomes consumers had received since IGCs had been set up, including the average charge of a policy. We also considered whether IGCs were appropriately structured, resourced and had the right processes in place to act effectively in members’ interests.
What we found
- we saw wide variation in the way IGCs operate, leading to different outcomes for members of different workplace personal schemes
- we had concerns about the independence and level of challenge provided by some IGCs, making it more likely that members would receive a poor outcome
- other IGCs were operating effectively, maintaining independence from the firms whose pension schemes they had responsibility for, delivering better outcomes for pension scheme members
- we found that GAAs operated by third-party firms on behalf of pension providers were less effective at delivering meaningful improvements in value for money
- over the period of our review (2017-2019) we found there had been a small reduction in charges across all pension savings, although this cannot be directly linked to the work of IGCs and GAAs
Next Steps
We expect providers and IGCs to work together to improve value for money for workplace personal pension scheme members. We have provided individual feedback on our concerns to providers and ICG chairs. Firms and ICGs need to review the examples of good and poor practice in this report and take action to deliver value for money for all relevant members.
For GAAs we will consider whether we need to make changes to our requirements to improve their performance. We will set out any changes in due course.
Alongside this review. we have also published a consultation paper (CP20/9[3]) on driving Value for Money (VfM) in pensions, with proposed rules on a clearer framework for VfM assessments and a requirement for IGCs to compare their firm’s schemes against other options on the market. This should lead to better and more consistent value for money assessments across the workplace personal pensions market.