Glossary · UK
What is Group Personal Pension (GPP)?
A collection of individual personal pension contracts arranged by an employer with a single pension provider, used by many employers to meet their auto-enrolment duties.
Full Definition
A Group Personal Pension (GPP) is an arrangement in which an employer sets up individual personal pension contracts, on broadly the same terms, for a group of employees with a single chosen pension provider, rather than establishing its own trust-based occupational scheme. Legally, each employee's pension is a separate contract between them and the pension provider, so unlike a trust-based scheme there is no trustee board -- governance instead sits with the provider and, for many GPPs used for auto-enrolment, an independent Governance Advisory Arrangement or similar body that oversees value for members. GPPs are widely used by small and medium-sized employers to meet auto-enrolment duties because they are relatively quick and inexpensive to set up compared with running a bespoke trust-based scheme, while still allowing the employer to arrange competitive charges by negotiating collectively with the provider on behalf of the whole workforce. Because each member holds an individual contract, a GPP pension generally moves with the employee if they change jobs in the same way that a stakeholder or standard personal pension would, and it can normally continue to receive contributions even after the person has left the sponsoring employer, subject to the provider's terms.