Group pensions are in effect a collection of individual personal pensions arranged by the employer. The employer is responsible for the collection of the employee contribution and will pay these to the pension provider on behalf of the group. This is usually deducted monthly from the employee wage by payroll. Due to the pension provider receiving one payment rather then a collection of individual ones, there is normally a reduction in administration costs. Such benefits can be passed onto the employees who are part of the scheme. Employers can also contribute towards the group pensions, offering further incentive for employees to join the scheme.
A rewarding pension scheme can ultimately be the difference that results in an employee choosing one company to work for over another. Employers usually offer group stakeholder schemes or group personal schemes.
Contributions to a pension scheme by an employer can be offset as a business expense, saving the business money on corporation tax through providing an employee benefit. For further information on this, and how you can use “salary exchange” to lower the costs of your business, please contact us on 0800 389 2193.
