Auto-enrolment – don’t forget the pension!
With most businesses slowly coming to terms with auto-enrolment – the set-up, the payroll and the overall process – it is all too easy to forget the main reason behind it all – the pension.
At the end of the day, making sure that you definitely have the right pension scheme for you and your employees has to be the main priority.
Yet a recent research study carried out by Portus Consulting shows that a third (33%) of employer respondents reported an increase in complaints from employees about their pension fund performance in the last two years.
This rise in complaints and concern about pension scheme performance from employees could mean that there are compliance and regulatory issues. For example, if the pension is not suitable for the employees and, say, the investment performance is poor, the employer could be liable for a claim and/or a fine from the pension's regulator, for which the employer may not have adequate PI cover.
The pension scheme that you set up is the employer's responsibility. As an employer, you should therefore be taking into account, amongst other things:
Cost
Investment solutions/suitability
Pension freedoms/flexibilities
Employee education
Suitability of the scheme
Annual communication with the staff
Reduction in annual allowance for high earners
Loss of transitional protection
Employee engagement
Ensuring the new entrant process is compliant
Ensuring contracts are correct
In addition to that, there are the questions of your attitude to risk, investment performance, the consideration of additional employee benefits and of course, scheme governance.
A good pension scheme is an excellent employee benefit. The employer needs to ensure that;
The scheme it selects is suitable and modern
The investment route is suitable
The employee communications and contracts are reviewed
The new entrant process is compliant
As corporate financial planning specialists, we can help with this process, working alongside both employers and their payroll provider to make sure the most suitable scheme is selected. We also provide a whole range of support services for you and your employees, including pension presentations/workshops, general retirement advice, reviews of individual employees' pension positions, annual review of the scheme plus an annual update for all employees plus a helpdesk which the employer or payroll company can refers its employees to.
Many employers are starting to feel more comfortable with the whole auto-enrolment process. So as we approach the end of the initial auto-enrolment stage, and head towards the mandatory three year re-enrolment date, it is time for many of you to think closely about the pension scheme that you have or are about to set up.
As mentioned above, auto-enrolment is not just about the process. It is about providing the best possible pension scheme for you and your employees.
To discuss auto-enrolment and your pension arrangements, contact Kellands Corporate today.