Running a pension scheme
Running a pension scheme effectively
It is the responsibility of scheme trustees to run pension schemes
in the best interests of the beneficiaries. As an employer, your
role is to transmit employees' contributions, provide your own (if
your business is contributing) and facilitate access. It is good
practice to assist the trustees to carry out their duties.
If you do not run an occupational scheme or offer at least 3 per
cent employer contributions to a personal pension, you will generally
need to designate a stakeholder scheme (after consulting with employees)
and provide employees with basic information on it.
Payments and deductions
The law requires you to make employees' payments to the pension
provider by the 19th of each month. You can be fined for failing
to do so. You must send your own contributions by the date agreed
with the provider. Ensure you have the right systems for making
deductions, paying over contributions and keeping records. If your
scheme is contracted-out on a money purchase basis, you will be
required to pay a minimum payment based on the combined reduction
in the employer/employee National Insurance contribution. This payment
must also be passed to the trustees or managers of the scheme by
the 19th of each month.
Communication
Keep the trustees informed about your plans for the scheme, significant
business matters and, if relevant, any administration matters. Consult
staff and, where appropriate, communicate with them on scheme matters
even where the trustees also do so.
Combined Pension Forecasts
Apply for combined pension forecasts available free from the Pension
Service. These allow your employees to see combined forecasts of
both their state and their current private or occupational pensions
so that they can make better-informed pension choices when planning
for their future. Combined pension forecasting involves the Pension
Service giving you details of the state pension to which your employee
is currently entitled and their projected state pension at 65 (state
pension age - currently 65 for men and 60 for women, rising to 65
by 2020). You include the information in the annual pension statements
that you send out to your employees.
Read
guidance on combined pension forecasts and registration forms from
the Pension Service website.
Pensions advice
You may consider offering access to pensions advice as an employee
benefit. From 6 April 2005, this can be done without incurring a
tax charge providing that the advice or information made available
is offered to all employees and costs the employer less than £150
per employee per year.
Subjects covered in this guide
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