This report represents the deepest and most transparent benchmarking of the performance, asset allocation and structure of DC workplace pension defaults yet conducted in the market, covering in excess of 95 per cent of the master trust sector by assets and members.


Default funds. The data on this site reflects the performance and strategy of the most commonly used funds in workplace pensions. Each provider has submitted the data of for the most widely-used workplace pension fund they offer – typically known as the ‘default’ fund. More than 90 per cent of workers invest in the default fund offered by their employer.

Short term performance. The data represents a snapshot in time, in an auto-enrolment market that has not experienced a serious market downturn, and covers many defaults that have only been running for a relatively short period of time.

Charges. The performance section of the report focuses on gross returns, that is before charges have been deducted. This is because charges levied can differ for different individuals. Most pension schemes have a single charge expressed as a simple percentage of the fund value. However, some schemes have a combination of a contribution charge – ie. a one-off charge on contributions – and an annual management charge, expressed as a percentage; or, a fixed monthly administration charge and an annual management charge. Individual schemes’ charges are detailed on the provider tables.

Comparing performance. Most of the schemes in this research have benchmarks that serve no purpose to their members. Who cares if your scheme has beaten its benchmark by 2 per cent if your neighbour’s default has beaten your scheme’s benchmark by 5 per cent? The Corporate Adviser Pensions Average (CAPA) is the average (mean) return over a fixed time period for all the schemes in the default universe for which we have been able to get data, and can and should be read alongside risk data. This averages out the performance of all defaults, unweighted for size. We also include data from the principal defaults of the big life insurers active in running contract-based workplace schemes, to ensure the index is representative of a greater proportion of the workplace pensions market.

Risk v Return.The Corporate Adviser Pensions Average (CAPA) is only part of the picture when it comes to judging whether a scheme is good or not, and at launch is only a single snapshot in time, meaning extra caution is required. Being below the CAPA does not mean a scheme is failing. Consideration should also be given to the level of risk taken to achieve the return. Ideal default pension funds have a higher level of performance for a lower level of risk, suggesting they will do less badly when markets are negative. See the risk/return data for details of the level of risk taken by schemes to achieve their returns.

The CAPA should be read in conjunction with the variety of other performance metrics available to professionals analysing default funds. However, the CAPA may help identify outlier strategies, and will serve to flag up issues where schemes fall significantly behind their peers. As time passes and our data set grows, consistent significant underperformance of the CAPA through multiple parts of the economic cycle should start to raise concerns amongst trustees, IGCs, advisers, employers and ultimately members.

Get involved. The CAPA has been created following lengthy discussions with industry experts. However, we want our analysis to be truly reflective of industry best thinking. If you have views on how we can improve the monitoring of master trusts and other defaults, or if you operate a default fund you would like included within the research, please contact us at john.greenwood@definitearticlemedia.com.