Posts Tagged ‘company pension scheme’

Pension Transfer Advice

Wednesday, August 29th, 2012

Pension Transfer Advice

Pension transfer advice, for the pot that you have accrued.  Most people switch jobs several times during their working life.  When you change employers, it is worth thinking about, combining your pensions into one pot.  It is easier to keep an eye on fund performance if your pensions are all under one umbrella.  A single pension pot will incur less paperwork and administration, and could also generate lower costs and better overall performance.  Sounds like a no-brainer?  In theory yes, however, there are some important issues to consider before taking the plunge seek independent Pension Transfer Advice.

Occpational Pension Schemes

Most occupational pension schemes and private schemes can be transferred, but there are restrictions and potential pitfalls.  It is not usually worth transferring final-salary or public-sector pension schemes the benefits are too good to lose.  You should only transfer if you have actually left a company.  If your current employer contributes to your existing occupational pension scheme, you should not switch.  Also it is worth noting that the money in your pension can only be transferred from one pension scheme to another (until you have retired), and not every new pension scheme accepts inward transfers.

Small Pension Pots

If your pension pot is very small, it may not be worthwhile switching: you will have to pay charges when you transfer, and some providers impose harsh penalties if you leave their scheme.  And, if you are relatively close to retirement, you might not have sufficient time to recover the costs incurred by transferring.

According to the Pensions Advisory Service, the Department of Work & Pensions (DWP) is set to publish a consultation paper examining the consolidation of small pension pots.  Possible approaches could see your pension pot moving with you when you change your employer; alternatively, when you change your job, your pension pot could be left behind and – unless you decide to opt out – the cash would automatically be transferred to a central aggregator fund.  The DWP believes the changes would increase the visibility of pensions saving: instead of seeing several small figures, each individual would be able to view one larger, consolidated figure.

Transferring and aggregating your pension pots might generate significant long-term benefits; however, any decision to do so should be taken for the right reasons.  Tread carefully and, above all, take expert advice before making an irreversible decision.  For Pension Transfer Advice contact Maxim Wealth Management  who are well-placed to help you with this.

Is NEST best for your business?

Thursday, September 15th, 2011

NEST, the National Employment Savings Trust launches in 2012.

All employers will be forced to set up a Company Pension Scheme for their employees or auto-enrol their employees into the new NEST pension scheme. Group personal pension schemes (GPPs) have emerged as one potential solution which could help employers keep control of what pension benefits are offered to different individuals.

NEST pension or GPPs?

The main attraction of GPPs is their simplicity. The employer passes contributions straight from payroll to the provider and this is then invested as per the employee’s instructions. Through a group scheme, each employee has their own plan so they benefit directly (and only) from their own contributions and can also decide how this is invested. Contributions benefit from tax relief at the employee’s highest rate and employers can also make contributions to top this up.

This not only helps the employee but also the company tax bill – and can also reduce national insurance contributions. In addition, an employer contribution of at least 3% (which will be phased in between 2012 and 2016) is a requirement demanded by the NEST rules. Note, however, the rules are still being finalised, so may be subject to change.

Finally, at the end of the employment, employees simply take their sub-plan with them and keep contributing themselves. This reduces the need for employers to administer retained benefits and also helps the employee keep their career pension savings in one place.

If you think your business would benefit from a group personal pension scheme rather than being forced to meet the requirement of NEST, our dedicated Corporate Pensions Advisor would be happy to help talk you through the pros and cons.  Call now on 0141 764 0040.

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