Company Pension Schemes

How to set-up a company pension scheme

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In its most basic form, a company pension scheme is one that has been set up by an employer for the benefit of its employees, with the intention of creating a fund for each employee that will form the financial basis of their individual retirement plans.

You may have heard about 'auto enrolment' into workplace pensions and wondered what your company needs to do in order to satisfy its pension obligations to your staff under the provisions of the Pensions Act 2008.

Setting up a workplace pension scheme requires careful planning and research, and as an employer you might benefit from the knowledge and information available to you from independent financial advisers before you decide how best to provide a workplace pension for your employees.

Company pension schemes

Under the Pensions Act 2008, every employer in the UK must put certain staff into a workplace pension scheme and contribute towards it

How do I set up a workplace pension scheme for my staff?

There are various options available to you when it comes to providing a workplace pension scheme for your employees.

Some decisions that you will need to consider before deciding which of these options is right for you and your business include:

  • As an employer, how much am I willing to commit to my company's pension scheme?
  • How do I make sure my company pension scheme complies with all necessary Government regulations?
  • What level of income will the workplace pension pay to my staff when they retire?
  • How much will the scheme cost, in terms of charges, fees and commission?
  • Do I need to involve my employees when setting up the pension scheme?
  • Can I choose how the pension funds are invested?
  • How do I choose the right pension provider?
  • Who will be responsible for running and managing the pension scheme?
  • Which employees are eligible to join a company pension scheme?
  • What happens if a member of staff leaves, or dies?

As is now required by Governement legislation, for businesses considering setting up and managing a company workplace pension scheme, the prospects might initially seem rather daunting, but assistance is at hand. QuoteRack is able to put you in touch with specialist financial advisers who will listen to your staff retirement plan requirements and then offer advice on how best to set up an employee pension scheme for your business.

Frequently asked questions

Who is eligible for a workplace pension?

Whichever provider you choose, the workplace pension that you set up for your company's employees will need to manage automatic enrolment.

If you run a small- or medium-sized business, your employees who need to be in your workplace pension scheme are:

  • Staff who are not already enrolled in a pension scheme
  • Staff who earn more than £10,000 per annum
  • Staff who usually work in the UK
  • Staff who are aged between 22 and their State pension age

What are the contributions for a workplace pension?

The current level of workplace pension contributions are:

  • Employer minimum contribution 3%
  • Employee contribution 5%
  • Total minimum contribution 8%

What are my ongoing responsibilities for a workplace pension?

Apart from paying into your workplace pension scheme, as an employer you have certain ongoing responsibilities:

  • You will need to check the eligibility of each member of staff, in terms of their age and earnings
  • Every 3 years you need to carry out a re-enrolment procedure to return any staff who have left your pension scheme
  • You will need to keep records, manage employees' requests to join and leave the scheme
  • Manage the relationship with the Pensions Regulator, to ensure ongoing compliance of your workplace pension scheme

How can QuoteRack help me?

As a small business owner, you have a wide choice of pension providers from whom you can choose to set up your workplace pension. The amount of time needed to fully research how best to go about setting up a workplace pension can be extensive.

QuoteRack can put you in touch with independent, FCA authorised and regulated financial advisers who will discuss your pension requirements in more detail and then help you to choose the most appropriate pension provider for you and your employees.

This process will significantly reduce the amount of time you need to spend as a company owner to set up and run a workplace pension scheme.

What other benefits are available to me as a company director?

A lot will depend upon your individual circumstances, but among the financial benefits available to you as a company director are:

What are the next steps to setting up a workplace pension scheme?

Simply click the 'GET A QUOTE' button to submit your details to QuoteRack's independent financial advisers, to discuss your workplace pension requirements without initial cost or obligation.

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