24 May 2018
“So, I have our company pension in place for the employees; contributions are being taken from pay and paid across to our pension provider on time and we have submitted our declaration of compliance to The Pensions Regulator (TPR). All seems to be swimming along lovely and I can now go back to focusing on my business and helping it to make profit.” As a key decision maker or owner of a business, these words may ring very true to you.
With your personal affairs, how often do you review your utility bills, satellite or cable TV contract or mobile phone contract? Personally, I probably look at mine every 2 or so years. I do it just to make sure that I am doing the right thing, that I’m not over paying and that the service I was promised two or so years ago is still the same today. If this is how we deal with our personal affairs, as a business owner, why don’t we do the same with such things as the company’s pension scheme or come to that matter any of the employee benefits? If its the general insurance, property rates or IT or phone systems, they’ll usually be reviewed annually so why not the same for the pension and other benefits?
Pension legislation as well as payroll software and pension systems are all very different now to how they were back in 2012 when Automatic Enrolment Preview (opens in a new window)started and is even more different in the last two years. However, has your company pension been amended/reviewed to keep up to date with these changes in legislation?
Questions such as the following should all be asked
- How is the default investment fund performing, and what are you measuring it against?
- Is the Annual Management Charge competitive?
- Does my employees’ pension target drawdown or annuity?
- Does my payroll provider have a direct link with my pension provider to simplify payroll processes?
- Do my employees value the pension?
- Can I help them with pension education?
Many people will comment that ‘if it ain’t broke’ don’t fix it’, however, if the pension doesn’t perform as it should and/or employees aren’t receiving value for money who do you think your employees would go to for answers?’
The scrutiny from TPR over the coming years on Workplace Pension is only going to intensify over the next few years and therefore it is important that a business has steps in place to defend itself and justify the decisions made to TPR if asked. A review of your Workplace Pension will either confirm that what you’ve done is still good today or highlight areas of improvement.
Either way, this is a positive message that can be sent to staff to re-assure them that you have everything under control and that they can continue to drive the business forward on your behalf.
For further information on our scheme suitability review services please contact the team on 01883 332260.
Richard is one of our Strategic Benefit Consultants specialising in Workplace Pensions.