Group Pensions and Auto-enrolment
Many companies will set up a pension scheme for their staff. It works under a trust and there are two types:
Defined benefit – this is where employees are promised a defined income when they reach retirement which is calculated based on their salary & length of service. The employer must set aside sufficient funds to provide these benefits. This income continues for the life of the employee.
Defined contribution – this is where a set amount of premium is invested by the employer and employee each month. A fund is built up over time, invested and generates a fund for the employee when they reach retirement age. The employee then has a range of options of how to drawdown this fund into retirement. See options in retirement:
Mason Wealth Management can work with employers and help set up a scheme that suits your business. We will help you choose a pension plan and provider and if applicable we can include additional benefits such as Death In Service and Income Protection. We can also talk to your staff individually ensuring they receive bespoke advise and help them choose an appropriate fund and contribution level.
Auto Enrolement
For employers that do NOT currently have a pension scheme in place, the government is planning to launch a compulsory auto-enrolment pension scheme. The current proposal would make it compulsory for all employers to introduce a workplace pension scheme and automatically enrol employees into it. Employers must then contribute a percentage of each employee’s salary to help fund their retirement. Details & exact dates are not yet confirmed, contact our advisers for more details.
If you are an employer exploring your options, call us today and ask us about Group Pensions.
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