Independent Financial Advice on Company Pension Schemes from a retirement specialist. We can help you choose the right company pension scheme. There are many types of company pensions available and the requirements of each company are different.
If you have at least five employees, by law you must offer them access to a pension scheme. You can meet this legal requirement by offering:
- an occupational pension scheme;
- a personal pension scheme that you contribute to; or
- access to a stakeholder pension scheme
From 2012, all employers will have to enroll their employees into a pension scheme and pay into that scheme.
A company pension plan is likely to be one of two general types:
a ‘salary related‘ or ‘money purchase‘ scheme.
In salary related company pensions the amount you get is based on your salary and the number of years you have been in the scheme.
In money purchase company pension schemes the amount you get is based on how much has been paid into the scheme and how well the company pension fund has performed. With the money purchase company pension plan at retirement your fund is used to buy an annuity.
Pensions are amongst the most significant employee benefits and aside from the advantages of occupational pensions companies must meet certain legal obligations.
The law requires employers to offer employees the chance to take advantage of stakeholder pensions if they are not offering an occupational arrangement. Even in these cases, however, there are a number of exemptions. Of course many employees take out their own personal pensions and save for retirement themselves.
An employer can contribute to an individuals personal pension plan and also the employee can do a pension transfer into the plan from previous schemes. For the majority the pension scheme investments will be into equity investments where the fund grows over the years to retirement and then the retirement investment is converted into annuities. Some at this stage take full retirement and others do pension release, where they take any tax free cash from the scheme and leave the remainder invested for later.