How to select a workplace pension scheme
In preparation for auto-enrolment you’re probably reviewing a shortlist of workplace pension schemes and, with your accountant, are likely to have checked that these chosen few comply with the auto-enrolment rules. But have you checked much further than this?
As well as having to fit the criteria for auto-enrolment there are a number of other checks you should be carrying out with each of your shortlisted providers, to ensure you are getting the best for you and your employees. Not only should you check you and your business are getting the best deal, you should be ensuring your most important assets – your employees – aren’t left with a raw deal.
We’ve put together some of the key areas you need to look for to help narrow your search for a workplace pension provider.
Best value for money – for your employees
It’s not all about you. In defined contribution (DC) pension schemes, which The Pensions Regulator predicts will be the most popular choice for employers, members will need to pay a small amount for the service, currently capped at 0.75% per annum. If this is the pension type you’re opting for, ensure that the provider is offering a competitive cost for the benefits that members receive – also make sure you’re clear on this so you can effectively communicate this out to your employees.
Keep your workplace scheme simple
Your employees lead busy lives and generally won’t have time to read through reams of complicated information about their scheme so ensure it’s kept simple. Opt for a scheme that is easy for your employees to understand.
The pension provider
When taking a pension provider into consideration find out how they make commercial decisions – do they take members’ needs into account in the process? Find out what their complaints process is and what protection is in place. If the pension provider found themselves in difficulty, what would happen to your employees’ contributions?
Understand investments
Before leaping to a decision, ensure you understand where members’ money is going to be invested and the risks this could carry. If you understand it, then your employees will and they’ll undoubtedly have questions about what happens to their money.
Ongoing communications
Find out how the provider communicates with its members moving forwards. It’s important that clear communications are regularly sent to your employees from the provider, and that this is done in a way that is easy to understand. Make sure you find out what happens when your employee retires – what communications does the provider send out to inform them of their options.
Delving further into the offerings of each workplace pension scheme provider should help you make that all-important final decision and find the best scheme for you and your employees.
Talk to Approved Accounting about Workplace Pension Schemes
If you’re looking for supportive small business online accountants based in Havant, Hampshire, who can help your business through the auto-enrolment staging process, then get in touch with the experts at Approved Accounting today. Call Jon Green now on 01730 823000.
