Company and employer-sponsored personal pensions…
… have been around for many years long before they were given the title ‘workplace pensions’ when automatic enrolment commenced in October 2012.
Many employers have recognised that providing staff with a formalised plan for their eventual retirement, not only helped with staff recruitment and retention but was also very tax efficient.
However, the numbers suggested that most employees of smaller companies missed out on such benefits. They were simply left to their own retirement planning devices, which invariably meant facing a significant shortfall in income when reaching the age of 60 or 65.
Things had to change and they have. All employees now get the opportunity to join their employer’s pension scheme, no matter how many staff members there are. If an employee is a UK resident over the age of 22 and earning more than £10,000pa (or the equivalent on a weekly or monthly basis), then they must be automatically enrolled into a Workplace Pension scheme and the employer must contribute at least 3% of pay.
The overall minimum contribution is 8%, so the employee will be required to make up the balance from their own pay.
Existing pension schemes
If you’re an employer with an existing Workplace Pension scheme, then you may wish to ask yourselves these three questions.
Is your scheme meeting your expectations and objectives?
Is your scheme helping you recruit and retain staff?
How do you rate the services provided by the scheme and your adviser, if you have one?
If you have just, or are about to, set up your own company and employ your first member of staff, you will very quickly receive a letter from The Pensions Regulator about Workplace Pensions. The letter will show you your Duties Start Date, which will be the date your first member of staff started with your company. This is the date from which you will be responsible for providing them with access to a Workplace Pension and paying contributions into their plan.
The letter will also show a date by which you must complete a Declaration of Compliance, confirming that you have set up a pension scheme and enrolled any eligible staff into it. The date of this declaration will be just five months after your Duties Start Date, so you must take immediate action when the letter arrives from The Pension Regulator.
Workplace pension specialist
Geoff has specialised in employer-sponsored pension schemes for many years, so if you want a financial health check for your current Workplace Pension, or need some help in setting up a brand new scheme, then please get in touch by any of the means just below, or via our Contact Us page.
Cansquared Limited is authorised and regulated by the Financial Conduct Authority. FRN 927062. Cansquared Limited is registered in England and Wales No. 8452816. Registered office: 24 Old Mill Ridge, Wadsworth, Hebden Bridge, West Yorkshire HX7 8RT