How to set up an employer pension scheme

Mar 4, 2024

In 2024, it’s imperative for businesses to reassess their financial structures, particularly concerning pension schemes and employee benefits. Many businesses find themselves with legacy defined benefit (DB) schemes that may not align with the evolving needs of their workforce.

Whether you choose DB or defined contribution (DC) schemes, in this blog, we guide you on the practicalities of setting up a new employer pension scheme, ensuring it meets the contemporary demands of both employers and employees.

Understanding pensions

The first step in establishing an effective employer pension scheme involves understanding the current pension landscape. Currently, there is a shifting emphasis towards more flexible and employee-centric arrangements, like DC schemes. These give employees greater control over their pension pots, building a sense of ownership and engagement.

While DC plans provide flexibility, DB plans are seen as more reliable over time due to their consistency. Ultimately, assess which suits the needs of your business and employees best.

Employee engagement

Engagement from employees is key when introducing a new pension scheme. Employee engagement not only enhances understanding but also ensures that the scheme aligns with your workforce’s diverse needs and preferences.

Consider conducting workshops or information sessions to address any concerns and clarify the benefits of the new scheme.

Communication and education

Ongoing communication and education are key components of a successful employer pension scheme. Regularly update employees on the performance of their pension investments and any changes to the scheme. Professionals can help you solve any puzzles regarding pensions and leave you to focus on other aspects of your business.


Implementing automatic enrollment encourages greater participation in the pension scheme. However, ensure that employees can opt-out if they choose to do so. A transparent and straightforward opt-out process promotes trust and flexibility and saves all parties time.

Assessing regulations

A regulatory framework is critical to the success of your pension scheme. Stay up-to-date with the latest legislative changes, ensuring compliance with auto-enrolment obligations and other regulatory requirements. Seek professional advice to mitigate legal risks and guarantee that your scheme aligns with the current regulations.


Recognise that one size does not fit all when it comes to pension schemes. Tailor your offering to accommodate the varied needs of your employees. Consider factors such as age demographics, risk tolerance, and retirement goals.

Offering a menu of investment options allows employees to choose the strategy that best aligns with their financial objectives and helps your business attain efficiency over time.


Carefully consider the investment strategy for the pension scheme. Diversification is key to managing risk and optimising returns; therefore, provides employees with a range of investment options, including both low-risk and higher-yield choices. Regularly review and update the investment strategy to adapt to changing market conditions.

Choosing the right provider

Selecting a reliable pension provider is vital. Look for providers with a strong track record in delivering effective pension solutions. Evaluate their customer service, investment options, and transparency. A provider with a user-friendly online platform can enhance the overall experience for both employers and employees.

Monitor and review

Establish a robust monitoring and review process to assess the effectiveness of the pension scheme. Regularly evaluate the scheme’s performance, employee engagement levels, and adherence to regulatory requirements. Solicit employee feedback to identify improvement areas and ensure the scheme remains responsive to your business’s changing needs.

Get expert advice

Setting up an employer pension scheme requires a proactive and people-focused approach. You can successfully manage pension planning by engaging employees and customising the scheme to meet diverse needs.

With a commitment to transparency, education, and ongoing evaluation, Bulley Davey Wealth Management can ensure that your pension scheme not only meets regulatory standards but also serves as a valuable asset in attracting and retaining top talent.

Get in touch for advice on optimising your employer pension scheme.

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