Choosing a group pension scheme is perhaps one of the most important decisions a company can make for its employees. We highlight some key factors for businesses to consider when making a decision on which scheme to go for.
What is a group pension scheme?
A group pension scheme is a type of workplace pension run by an employer. The most common type of group pension is a defined contribution scheme – often set up as a group personal pension – which a business offers to its employees in line with the government’s automatic enrolment duties for workplace pensions.
Employers have to provide a workplace pension scheme for eligible staff as soon as your first member of staff starts working for you (known as your ‘duties start date’).
- Choosing the right scheme
It’s important that the pension scheme you choose meets auto-enrolment rules, or your business could be faced with a serious fine from The Pensions Regulator. Other points to think about are whether the scheme works with your company’s payroll software, what investment options are offered and what charges need to be paid.
- Finding the best provider
Different providers offer different features, so it’s important to find one that best suits your business and employee needs. Fund options, employer and employee charges, tax relief options and the providers’ credentials are all key things to consider.
- Being transparent with employees
A good group pension scheme can help maintain staff loyalty. It’s important that you let your employees know in writing the date that you added them to the pension scheme, the type of pension and who runs it, how much you both will contribute to the pot, and how they can leave the scheme if they would like to.
Do you understand your pension obligations?
Choosing a group pension scheme can feel like a complicated burden to deal with for employers and keeping up with changing regulations is a serious responsibility. At George Square Financial Management, our team of experienced advisers can help guide you through the pension maze and recommend and implement an appropriate solution for your business.
To arrange a review of your current pension arrangements to check it is still the best solution for you and your employees, or to chat about setting up a new group pension scheme, please get in touch.