Pension Planning - Employees

When an employer is considering installing a pension scheme as part of an employee benefits package, it is essential that the type of arrangement chosen suits both the employer and employees needs in terms of cost and the benefits provided.

It is widely accepted that pension funding in the United Kingdom is in some crisis. The recently published Turner Report highlights significant shortfalls in the amounts being saved and recognises that there is still considerable burden placed on the State to look after people in retirement. Most importantly, as a sweeping statement, people do not appreciate what they should be doing.

Either as part of the overall employee benefit package structure, or as a stand-alone exercise, Focus will work with you to design and set-up a pension scheme that is right for both your company and your employees.

A pension scheme is a benefit that should be valued by both employers and employees. For employees, it provides a means to save for retirement and it can often mean their own contributions are topped up or matched by their employer, so there’s more being paid into their pension. For employers, it can help to attract and retain good quality staff.

Prior to April 2006, the decision process was more complex as more options were available. The situation is now more straightforward with the advent of Pensions Simplification. Unless a company want to establish a costly Final Salary scheme, the choice for a company is really a Group Personal Pension scheme.

This is where each employee can benefit from bulk buying/group arrangement but they have their own individual policy. The Company benefit from the kudos of providing a pension benefit but without much of the hassle and on going responsibility that was previously associated with Occupational Pensions.

The real challenge is to arrive at a sensible level of employer contribution and decide what requisite commitment is required from your employees.

Another consideration, and potential cost-saving option, is that of salary sacrifice. More and more companies are moving to this option to benefit from the resulting saving in National Insurance Contributions. This is a complex area and requires speciailist advice both for the company and the employees, which we can provide.

Effective communication has been at the centre of our development over the years. Although we benefit from using the very latest technology solutions, our experience has told us that there is simply no substitute for sitting down in front of people and explaining issues in a clear and concise manner.

Our approach is to meet each individual employee, face to face, to explain the benefits of the schemes being provided.

We are also able to offer our full range of personal financial planning services to each employee, to include advice on Mortgages, Investments and Home and Motor Insurance.

PENSION REFORM - 2012
While the full proposals include reforming the State Pension to make it simpler and more generous, and extending people’s working lives, the key reforms for employers relate to the Government’s ideas for making it easier for more people to save for retirement.

The Government estimates that about seven million people are currently undersaving for retirement. As a result, it is putting the onus on employers to help encourage more people to save:

• You’ll be required to automatically enrol employees into a Personal Account, a simple, low-cost pension scheme being introduced by the Government, or your own Company Scheme if it meets certain criteria.

• You’ll be required to contribute a minimum of 3% of each employee’s eligible earnings which is intended to incentivise them to join. They will add their own contributions to this to meet a minimum 8% contribution rate.

By establishing a pension scheme now that meets the qualifying criteria, this legislation needn't affect your company's pension provisions. More importantly, you will be seen by your employees as a proactive employer that cares about its employees.
 
We can help with all areas of your Corporate Financial Planning needs:
 

• Employee Benefits
• Commercial Insurances
• Keyperson & Shareholder Protection