What could be a perfect fit for one company may not be for another.
There are a variety of factors to consider:
- Consider the variety of pension schemes in the market as detailed above
- The provider’s quality and governance
- Investment options and management
- The charges that are applied to both employers and employees
- Member retirement options
- Customer service
- Process and integration with payroll
- Communication materials and support
- Assessment tool or integration with payroll assessment tools
- Certification basis i.e. how an employer defines pensionable salary and the percentage that is contributed to the pension scheme
- Whether the pension scheme is a qualifying arrangement
- How the declaration of compliance will be completed and submitted to The Pensions Regulator
- Storing of records and communications, legally required
- Business owners and senior management teams – who may have unique or specific individual requirements that do not fit a group pension
- In every three years, a re-enrolment and re-declaration of compliance process must take place, therefore processes and the pension scheme must be able to facilitate this
Aside from the essentials above, employers may also want to think about:
- How are the investments in the pension made?
- Does the default pension fund invest in companies that contradict what the employer and its employees’ value?
- Are there ethical options available?
- Is there a Shariah compliant fund?
- How sustainable are the investments?
- How are investments governed, are they performing as well as they should in their sector?
- Will employees settle for a pension scheme ‘that will do’?
It is an employer’s duty to make sure they provide a workplace pension to its employees, that pension can come in a variety of formats. Decisions an employer makes will have an impact on all their employees’ future retirement options and savings.
What could be chosen at the beginning of an employer’s automatic enrolment journey may not be right now. It is important to continually review the pension scheme suitability with a regulated financial advice firm who have extensive experience in the workplace pensions arena.