Choosing an Auto Enrolment scheme can be a real headache and it’s important to stress that not all schemes are created equally.
Whilst it may be possible for you as an employer to make the selection alone, we would strongly recommend using an independent financial adviser. They’ll have access to a wide range of products and can tally your needs with the right scheme for you.
Many organisations might simply see Auto-Enrolment as a burden but making the right scheme choice, may lessen some of this burden as well as have a very positive impact on your employees so it’s important to do your research.
Some good questions to consider when selecting a scheme are:
• Are communication costs covered (the scheme provider should report on a regular basis to each enrolled employee on their pension status)
• Is there a setup fee applied to small employers?
• Do they have simple requirements and on-boarding process?
• What are the ongoing costs?
• Will employees have to make a series of complex investment choices to save for their retirement?
Most employers are likely to use a defined contribution (DC) scheme for automatic enrolment. This is largely because these types of schemes do not promise the member a guaranteed size of pension at retirement. For you the employer, this means you’re only committed to paying a finite amount of contributions to the scheme in respect of eligible workers.
Obviously the core thing to consider when choosing a pension scheme for your staff is that it meets the criteria set out in the regulations, but it’s important to also choose a good quality scheme that provides value for money and protects your staff’s retirement savings and this is where a financial adviser will be worth his/her weight in gold with hundreds of schemes at their fingertips and an in depth knowledge of the sector in general.
The pension regulator provides a handy tool for you to double your scheme meets the regulations, you can find it by clicking here.
A financial adviser will also be able to advise as to whether your current scheme for existing members meets the qualifying criteria or if it will need changes.
If you would like to learn more, why not visit our website www.credius.com? For direct advice, or to arrange an appointment email firstname.lastname@example.org or call 020 7562 5858.
Next time: Communicating Auto Enrolment to your Staff