Most people agree that the implementation of ‘Auto-enrolment’ of contributions into a pension arrangement by the government from 2012 is a big step towards increasing retirement income for individuals.
Many employers face difficulties ensuring the product they use to meet the governments requirements is suitable for the business in terms of administration, financials and differentials and for their workforce in terms of charges, investment options and ongoing advice.
Does your existing scheme meet the minimum requirements?
It may be that your current scheme meets or exceeds the required minimum standard already and as such only subtle changes need to be made to meet the minimum requirements.
Alternatively, it may be that your current scheme falls short of the minimum requirement and therefore careful administration and cashflow planning needs to take place
What if we do not have an existing scheme?
It may be that you as an employer have no current scheme whatsoever and therefore you need to decide whether or not you:
– Opt for the government run National Employment Savings Trust (NEST) arrangement or
– Establish a bespoke arrangement from a market leading pension provider.
The presence of NEST in the marketplace with gather momentum over the coming weeks, months and years and for some employers it will be the most suitable provider but for others they may decide to ‘stand out from the crowd’ and offer something more bespoke for their employees. Some less positive features to be noted when considering the NEST product are:
- The 1.8% initial charge on contributions
- There will be a limited choice of investments funds
- There is a contribution cap of £4,271 (in today’s terms) per tax year which may necessitate the implementation of a separate scheme for higher paid employees
- Transfers of other pension benefits to and from NEST will be prohibited initially with this rule due to be reviewed in 2017
Over the past few years the ease at which we can review our own personal financial situation has grown through the use of comparison websites and the internet in general. A review of your employee benefits can be just as simple by allowing one of our qualified advisers to meet with you at your offices.
Regardless of what category you fall in to with your existing benefit arrangements, a review to ensure these remain competitive in the current market and relevant to your business and its employees could be invaluable. With the deadlines for decisions to be made regarding matters such as auto-enrolment and contribution basis for pensions ever drawing nearer, the earlier you can review things including the financials involved the better placed you will be to plan for the future.
Wingate Benefits Solutions are here to assist you in planning for the new reforms, all aspects of Employee Benefits and Business Protection. Should you wish to discuss the above in more detail or any other aspect of your business please do not hesitate to contact your usual Wingate Benefit Solutions adviser or call us on 0844 406 0027.