Pension and benefit solutions for smaller companies.

"Retirement is when every day is Saturday - goodbye tension, hello pension!" - Anon

"The question isn't at what age to retire, it's at what income" - George Foreman

"Cessation of work is not accompanied by cessation of expenses" - Cato

"Retire from work, but not from life" - M K Soni

"Don't simply retire from something; have something to retire to." - Henry Emerson Fosdick

"The wiser mind mourns less for what age takes away than what it leaves behind" - William Wordsworth

"A prudent question is one-half of wisdom" - Frances Bacon

"You can do without money but you can't be old without it" - Tennessee Williams

"Fail to plan and you plan to fail" - Dash

"As in all successful ventures the foundation of good retirement is planning." - Earl Nightingale

"If you don't know where you're going, you are probably going to end up somewhere else" - Laurence J Peter

"There's one thing I always wanted to do before I quit….retire!" - Groucho Marx

"I advise you to go on living solely to enrage those who are paying your annuities. It is the only pleasure I have left" - Voltaire

"Retirement; It's nice to get out of the rat race, but you have to learn to get along with less cheese" - Gene Perret

Your scheme choices

From October 2012, you have 3 ways to provide a workplace pension scheme:

Through the National Employers Savings Trust (NEST). This is run on the governments behalf by the NEST Corporation, who take all the decisions about administration, investment and scheme communication.

Through a group of individual, contract based arrangements: A grouped Personal Pension Scheme (GPP), a grouped Stakeholder Pension (GSH) or a group of self invested Personal Pensions (GSIPP).

Through a trust based, occupational pension scheme, sometimes known as a Contracted-In Money Purchase Scheme (CIMP).

If you have to do it, why not do it properly?

For most people, pensions are shrouded in mystery and therefore not a priority. That's why the government have pressed ahead with the auto enrolement regulations, to increase the chances of people making proper pension provision.

As an employer, you have a basic choice: If you do the minimum and auto enrol into NEST, you have few decisions to take but you'll get very little credit from your employees for the contributions you pay on their behalf. Its just another tax.

If you run your own arrangement though, you stay in control and give real help and support to your employees. There is benefit for all in helping people to reach retirement with an adequate pension fund, especially now the default retirement age is disappearing. It's a lot easier to manage employees out of the business if their income needs are taken care of.

What's involved?

For a scheme to be well run, it needs to be managed. That means dealing with issues like:

Choosing and reviewing advisers.

Choosing and reviewing service providers like insurers, administrators and investment managers.

Establishing internal procedures to deduct and pay contributions on time.

Complying with the law and regulatory guidance.

Keeping records.

Communicating with members so that they know how the scheme works, what their options are and value the scheme.

Assessing and managing risks associated with running the scheme, including the risk of members seeking legal redress if things go wrong.

At the moment, meny of these governance functions are voluntary if you use contract based arrangements, but aren't they sensible anyway? The Pensions Regulator will be reviewing this over the coming months in any event, given the governments' objectives and the fact that so many new pension schemes are likely to be established.

Our view

There remain considerable atrractions to providing work place pensions using a trust based occupational scheme rather than a contract based arrangement. Here's what we think are the main advantages:

Scheme governance is undertaken by a completely impartial body, the trustees, whose only concern is the members' best interests.

In a trust based scheme, the administrators and investment managers, such as insurance companies, are appointed to the scheme. They are not the scheme itself. In contract based arrangements the scheme is a contract between the provider and the member. It is the scheme. This facilitates, for the trust based scheme, building a strong identity as an independent scheme of the employer, particularly as provider branding is less necessary to satisfy financial services legislation.

The provider market constantly evolves. Adopting new ideas and processes may not be possible with your current provider so you might have to change them. Trustees of an occupational scheme can make service provider and investment changes for the future and retrospectively. The scheme can therefore evolve more practically and straightforwardly than with contract based arrangements.

Members of a trust based scheme still retain the right a refund of contributions if they leave service within 2 years of joining

If you're concerned about taking on trustee responsibilty, there are ways round that by, for example, participating in a master trust or appointing a specialist trustee firm as sole trustee.

The choice is yours of course and we'll work with you to deliver the best outcomes whatever choice you make.

For a free discussion about your choices, please feel free to contact us or click here to find out more about our services.