Contact SGD Pensions Consulting now for more information:
Tel: 0844 870 9964
Email: info@sgdpensionsconsulting.co.uk
New Pension Reforms
The government has introduced new legislation which means all companies will have to automatically enrol their eligible workers into a contributory pension scheme. This requirement will be gradually phased in, beginning with the largest employers in 2012.
NEST (National Employment Savings Trust) is a pension scheme which has been designed to meet the employer’s responsibilities. It has been designed to be a low cost option, simple and available to all employers, irrelevant of their size. Although it has been designed to have low charges, it will have a limited range of investment choices available as well as restrictions on initial transfers and levels of contributions.
The National Employment Savings Trust pension scheme will be operated by the NEST Corporation; they are a non-profit corporation run by trustees and will be governed by the Pensions Regulator. NEST has been designed to provide employees with access to a pension plan. However, there may be other pension schemes which are more suitable to an individual’s circumstances. For higher earners and others requiring more diverse investment options, NEST may not be suitable option.
Auto - Enrolment into Pensions and Employer Requirements
From October 2012, employers will be required to auto enrol eligible employees into the NEST Pension Scheme (unless you already have a company pension scheme which meets all the qualifying criteria or you have already set up a qualifying scheme).
The NEST Pensions scheme – previously known as Personal Accounts – is designed as a mechanism for employees on lower earnings who may not have access to a company pension scheme. It is intended as a low cost, simple way for employees to save money for their retirement with the following features:
- Low Fees
- A default investment fund
- Limited choice of investment funds
- A limit of £4200 a year contribution level
- The National Employment Savings Scheme will be a non-profit corporation
- Operated centrally by the NEST Corporation and will be under the regulatory control of the Pension Regulator
On first review the NEST Pension Scheme seems to be a good thing for employers. Some employers may think that it’s an easy way of setting up a pension, than initiating and implementing a different quallifying pension scheme. It’s worth noting however, that the NEST scheme isn’t likely to appeal to a lot of employees, especially those who are on higher earnings or for employees who require a varied investment choice and greater contribution levels.
Starting your own qualifying company pension scheme may be a more suitable and just as easy a way to recruit, retain and offer an effective employee benefit to the majority of your workforce. We offer a free initial consultation without obligation to discover what would be best for your business.
If you have any questions please conact us to speak to an adviser or alternatively use our call back service and one of our advisers will call you back to discuss your requirements. If you would like a copy of our New Penions Reform Guide then please complete your details to the right and download your free copy.
