In the Department for Work and Pensions (DWP) consultation response a fortnight ago, the government declared that qualifying group Sipps must have a default fund that “resembles that of a group personal pension (GPP), be priced at levels comparable to those found in a typical GPP”, and comply with good practice guidance on designating default funds.

Automatic enrolment into self-invested option is not permitted, and members should not have to pay for features that they do not use.

Jonathan Watts-Lay, director at Wealth at Work said the announcement was good news, and that the firm’s group sipp would qualify in its current state.

“Group Sipps should be cost effective by providing core fund ranges as well as a limited broader choice of funds for those who wish to go beyond default funds. This is a new world in the occupational space,” he said.

By allowing group Sipps to be used as qualifying schemes, employers will be able to provide increased flexibility for members and provide a single pension scheme for all employees, from the lowest level of staff through to executives, he added.

John Lawson, head of pensions policy at Standard Life, also spoke in favour of DWP’s decision. “This is a sensible conclusion,” he said. “Group Sipps are now a mainstream form of group pension scheme and are used by some of the largest employers in the UK. In practice, for most members, these operate just like GPPs and, in many cases offer lower charges than some GPPs.”

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