Group Pensions

Do I need it?
Companies are not obliged to set up their own company (or occupational) pension scheme, but the government has stated it intends to encourage company schemes as the best way for companies to provide pensions for employees. Importantly, introducing a pension scheme can have significant and distinct advantages for your business. One of the key benefits of a workplace-based scheme is its perceived value and the positive effect it can have on recruiting quality staff and retaining employees.

Why would you want to establish a new pension scheme?

to offer a tax efficient benefit to employees

to be perceived as a good employer

to offer competitive employment packages

to update an existing, out-of-date pension scheme

There is also the important financial benefit for pension schemes approved by HM Revenue & Customs (HMRC), as extensive tax relief is available on:

employees' contributions – income tax relief

employer's contributions – corporation tax relief

scheme investments – income and capital gains tax relief

All of this makes the provision of a pension scheme a tax-efficient way of increasing and enhancing employee benefits and remuneration.

What is it?
Selecting the correct pension scheme, for yourself or your employees, can be a complex and time consuming process.

To help you decide which pension would be most appropriate, for yourself or your company, our specialist pension consultants can advice and arrange the most appropriate pension scheme for both yourself and your company.

This means that whether you are employed or self-employed, a partner in a business practice or a director of a limited company, we will be able to give you pragmatic and considered advice for the most appropriate pension for your situation.

Summary of Options

Group Occupational pension
These schemes - particularly salary-related schemes - are now mostly offered by large companies and the public sector.

Group Personal pensions
These provide an alternative for small and medium-sized businesses which want to offer pensions as a method of attracting and retaining good employees, but are wary of and daunted by the Pensions Act.

A group personal pension (GPP) scheme is a collection of individual personal pension plans which is combined and administered by the pension provider. This type of arrangement allows you to tailor a scheme which meets your needs and also those of your employees. (Stakeholder pensions can also be grouped in this way).

Group Stakeholder pensions
There may be some employees who do not qualify for your existing company scheme, or if you do not have a scheme at all, you may need to offer the option of a stakeholder pension.

Employers with five or more employees are required to operate a stakeholder pension scheme if they do not offer them access to a good-value company pension scheme.

Group Final Salary scheme pensions
Can be referred to as ‘defined benefit’ schemes but these have largely been discontinued as operating these final salary schemes has become very expensive to administrate.

What should I do now? Because of our wealth of experience in providing group pensions advice to our clients over many years, we are able to offer individually tailored products and services for a range of situations.

For an informal discussion please call us on 01325 353 818 and we will be happy to discuss this further. Alternatively please email us at webenq@bibinsurance.co.uk