What is Group Personal Pension (GPP)?

Full Definition

A Group Personal Pension (GPP) is a type of workplace pension in which the employer arranges for each employee to have their own individual personal pension contract with a pension provider, rather than all staff belonging to a single trust-based occupational scheme. Legally, each employee is the direct customer of the pension provider, and the contract sits between the two of them, even though the employer facilitates enrolment, negotiates the charging structure and usually arranges payroll deductions for contributions. GPPs are commonly used to meet auto-enrolment duties: contributions from both employer and employee normally satisfy the statutory minimum of 8% of qualifying earnings (at least 3% from the employer), tax relief is applied in the same way as other defined contribution pensions, and the pot can usually be transferred elsewhere, including to a Self-Invested Personal Pension, if the employee changes jobs. Because a GPP is a collection of individual contracts rather than a single trust, it is regulated by the Financial Conduct Authority rather than governed by trustees in the way a trust-based occupational scheme or a Master Trust is, which affects how charges are overseen and how member interests are represented.

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