Smaller sized schemes: Does size really matter?

After the rollercoaster of a year last year, 2021 looks to bring us just as many twists and turns, especially in the pensions market. With the Government bolstering the powers of The Pensions Regulator (TPR), all eyes fall on the smaller sized schemes as the eventual crackdown on poor governance looks ever more likely.

The Pension Schemes Act 2021 looks to provide TPR with new powers and responsibilities in their role in ensuring that Schemes are being adequately run and offering the best value for money. Smaller sized schemes will always be at a disadvantage to their larger counterparts, mostly due to the lack of economies of scale, but this does not mean that they cannot continue and compete. TPR have run and will continue to run consultations with relevant members in the market to understand what they can do to ensure that member’s interests are being looked after most efficiently. Follow our blogs for future updates that will keep a close eye on the new legislation as it slowly becomes implemented into the market.

The COVID-19 pandemic has impacted a significant number of countries globally. This has caused major market fluctuations that will have affected most, if not all, UK pension schemes. If there was ever a time to look at whether you are offering the best value for members, now would be that time. Trustees need to be prepared for any eventuality that may occur, so that their members can have that peace of mind that their assets are being held in the best place for them. They need to ensure that each of their advisers are offering the most efficient service for the fees paid as poor administration and poor governance will cost members in the long run and this impact will be considerably larger for smaller sized schemes.

Overall, pension schemes need to be diverse. They need to ensure their day-to-day functions are adapted to meet the ever-changing demands and constraints of the market and background legislation to survive. If not, TPR may come knocking.

If you are unsure whether you are running your scheme efficiently, or would like to know more, please contact us to book a free desktop review of your scheme. This will allow us to take an in-depth look, to see where improvements can be made and provide our best recommendations to you. You can do this by sending an email to