How Consumers Assess Value for Money in Workplace Pensions

How Consumers Assess Value for Money in Workplace Pensions

This work was about workplace pensions, but we believe the learnings from it will have wide applicability to other types of product or service.

A couple of years ago the FCA tasked workplace pension providers with setting up Independent Governance Committees (IGCs). One of the requirements was to evaluate how customers assess value for money with workplace pensions.

The view from the Zurich IGC was that ‘decades of research had not got us very far’.  They also required research that would stand up to peer review and would measure relative values of benefits, not just priorities.  So it had to achieve much more than any research in the area had done before.


This came with three big challenges:

  1. People don’t understand the fundamentals of the category, so struggle to give useful answers
  2. The features of pensions are opaque and unpredictable, making them difficult to assess
  3. The requirement for precise measurement of relative value for money places great pressure on people’s cognitive ability to trade off benefits against charges.


Deliberative workshops were conducted, carefully exploring people’s perceptions and identifying the right issues.  Then quantitative research was implemented using a range of new techniques.  Specially developed education materials and a combination of different conjoint techniques were used.  Key deliverables included measurement of the values of product and service features in terms of their equivalence in charges, which was compared to internal estimates of costs to deliver.

The result surpassed the IGC’s expectations.  It was used to develop their value for money principles, and was quoted extensively in the chair’s annual report.  It has given a new perspective to the industry, and shared with other IGCs and the regulator.  It informs new business tenders, communications and ongoing pricing decisions.

The chair of Zurich’s IGC, Laurie Edmunds, CBE stated: "I haven’t seen research like this in over 50 years".  


Authors: Roger Faulks (Zurich) and Kevin Ford (ORC International)

Members: Full presentation available here.