We like to be practical here at Investment Sense, offering ideas that will benefit both you and your employees.
So whether you run a pension scheme for your employees or not, read on for some practical hints and tips to really benefit your business and your employees.
1. Review existing schemes
Over the past few years new pension products have been introduced; things may have changed considerably since you implemented your existing scheme.
Do you know how your employees’ money is performing? Are the charges on the scheme fair?
Regularly reviewing both the scheme and the underlying investments are vital, you probably do it for your own pension, why not your employees’ scheme?
2. Consider offering salary sacrifice
This can in the right circumstances help to increase employees’ take home pay, at no cost to you, alternatively the effective increase in take home pay can be used to increase pension contributions and therefore help to provide a more comfortable retirement.
Whichever option is chosen, salary sacrifice can be of great benefit to your employees at a time when they are financially more stretched than ever.
Salary sacrifice is complex, it is right for some and not others, but it can be very effective. More details can be found by clicking here.
3. Consider your position if you don’t offer a pension
If you do not offer an existing scheme or if what you do have in place for your employees does not meet certain criteria you will, over the next few years, be forced to make contributions on their behalf.
By October 2017 employers will have to pay 3% of their employees’ salaries into a pension on their behalf. This amount will be phased in over the years leading up to October 2017..
The sooner you start to plan for these changes, the sooner your employees will benefit and the less of a shock it will be for your business.
4. Do it because you want to, not because you have to
By 2017 all employers will be forced to contribute to their employees’ pensions.
So why not embrace it, start to consider what you could do now.
Times may be tight, but there is always something you could do on the pension front to help and show how your employees will really benefit from your contributions.
If implemented correctly, your employees will see pension contributions made on their behalf as a real benefit
5. Choose your IFA carefully
Whether you are choosing a new IFA or already have an adviser, make sure that they are prepared to spend time with your employees.
They should ensure that your employees understand their pension, are comfortable with how it works, and are available to provide regular reviews or surgeries for your employees. All of this will help the take up of the scheme and help your employees see the scheme as a real benefit, and not just another cost.
The IFA firm you work with should also be prepared to help with the administration of the scheme. Even small schemes can take a significant amount of administration; make sure your IFA helps with this burden.
6. Consider adding death-in-service cover
In years gone by Occupational Pension schemes often came with death-in-service cover included.
Over recent years however, Group Personal Pensions have become more popular, and these do not provide the facility to include death-in-service cover, the popularity of which has therefore fallen away.
Why not consider offering a death-in-service benefit alongside your pension scheme?
It can be a very cost effective way of providing life cover for your employees, indeed you could join too. Furthermore, if presented correctly to your employees it will be seen as a real benefit by them.
Whether you have an existing scheme in place or do not currently provide a pension for your employees, take time to think about the benefits of a pension for them. Think about how it is marketed to your employees, could it be better? Could benefits be emphasised more?
Our team of IFAs here at Investment Sense are experienced at both reviewing existing schemes and recommending new arrangements. We would be delighted to discuss your requirements in more detail and can be contacted 0115 933 8433 or by email at firstname.lastname@example.org