Smart Pension - how it works
What is Smart Pension?
Smart Pension is a pension scheme that enables employers in the UK to automatically enrol employees in a workplace pension.
So, if you're company tells you that a percentage of your salary is going to be paid in Smart Pension each month, this is why.
Smart Pension is technically called a 'master trust'. In this guide, we'll explain what this is and why it matters, how Smart Pension works and whether you can transfer old pensions into the scheme.
How do master trusts work?
A master trust is a type of defined contribution pension that can be used by multiple employers - with independent trustees who look after pension savings on behalf of all the employees who are members.
So you might find that you have the same pension as your neighbour, even though you work for different companies.
Although the major decisions are taken by the master trust, your employer can still make decisions about contributions, investments, and benefits.
Many employers have chosen to use a master trust pension scheme to automatically enrol their staff into a pension, rather than set up and run their own workplace pension scheme.
How much can you pay in via Smart Pension?
This all depends on what your employer offers you as part of your pensions package, but you will make contributions, along with your employer and the government.
The minimum amount you must contribute is set by the government and show in the table below. We've explained this in more detail in our guide to pension auto-enrolment.
Other people, such as family and friends, can also pay into Smart Pension for you.
Like all other workplace pension schemes, you'll receive tax relief on pension contributions from the government. So the minimum employee contribution is effectively 4%.
| Employer minimum contribution | Staff contribution | Total minimum contribution | |
| Contribution | 5% | 3% | 8% |
What are Smart Pension's fees?
The company charges employees an annual management charge of 0.30% and a monthly fee of £1.75 (waived if account is worth £100 or less).
Can I transfer my pension with Smart Pension?
Transferring out
You can transfer your pension money away from a Smart Pension fund.
You need to download a 'Transfer Out' form from Smart Pension's website and send it to the new scheme. It will then contact Smart Pension.
After a transfer has been initiated, the process can take several months - typically an average of 12 weeks.
Transferring in
You can transfer other pension pots into The Smart Pension for free.
To transfer in, Smart Pension needs a letter of authority from you and a current benefit statement from your old pension provider.
These need to be sent to Smart Pensions, who will check that the plan is suitable and contact the old provider for any further information.
There are some pension plans or schemes which are not acceptable due to being an incompatible type or potential loss of benefits upon transfer. These will likely be any defined benefit and final salary pensions you might have.
Where can I invest my pension with Smart Pension?
Smart Pension currently offers eighteen different funds that savers can choose from.
- Smart Active Impact Equity Fund
- Smart Active Impact Bond Fund
- Smart Sustainable Growth Core
- Smart Sustainable Growth Plus
- Smart Growth Fund – Lower Risk
- Smart Sustainable Growth Fund
- Smart Growth Fund – Higher Risk
- Smart UK Equity Index Fund
- Smart World (ex UK) Developed Equity Index Fund
- Smart North America Equity Index Fund
- Smart World Emerging Markets Equity Index Fund
- Smart All Stocks Index – Linked Gilts Index Fund
- Smart Global Bond Index Fund
- Smart Cash Fund
- Smart Income Fund
- Smart Annuity Fund
- Smart Sharia Fund
- Smart Ethical and Climate Fund