A Group Personal Pension Scheme is organised through an employer. Simply put you benefit from a group scheme with lower charges a minimum employer contribution.
Do not confuse it with a Final Salary Scheme, which is a Defined Benefit Scheme offered by your employer. These can be very expensive for employers and are now seldom offered outside the public sector to new employees. If you are in a big company that offers you a final salary scheme, it is highly likely that you should grab it with both hands without delay, because your employer is bearing the investment return risk.
A good Group Personal Pension Scheme can be an excellent staff motivational tool, which aids staff retention and marks the employer as someone good to work for. It improves morale and productivity, as well as attracting the best to come and work for the business. For this reason, some employers will make a significant contribution to the Group Personal Pension Scheme in addition to passing on the employees contributions paid directly from salary. There are tax inefficiencies for the employer and employee regarding Employer’s National Insurance Contributions.
If most of the employees join the Group Personal Pension, with professional advice the critical mass enables savings to be made in the fees charged, which improves your personal pension pot. It may also provide the muscle to negotiate extra flexibility.
Employers can structure matters so that the charges for are paid by the employer rather than the Group Personal Pension Scheme. Group Personal Pension installation and servicing charges are an allowable business expense for corporation tax. The pension investment performance is improved, because the Group Personal Pension Scheme is not paying the charges, so your ultimate pension will be higher. This can be particularly helpful to directors or key high paid employees, who might hit the Lifetime Allowance Limit.
Wexdon offers employers a free review of any existing Group Personal Pension Schemes, to investigate
whether an employer could change to a better provider,
whether a tender is likely to yield savings of charges and fees
whether a default investment strategy should be changed because circumstances have changed.
If the Group Personal Pension Scheme is set up so that the individual employees chose the funds in which their pension pot is invested, we can advise on which funds are most suitable for your risk tolerance and help you understand the options open to you.
The Independent Financial Advisors we recommend will offer an initial appointment is free of charge – no matter how long it takes. Our recommended IFAs are happy to meet at your home or office in London or Hertfordshire. We may visit your home or office in another part of the UK. If you are further away, or you prefer, we offer meetings by Skype video-conferencing. Taking a little bit of time now can improve your standard of living in retirement quite substantially. Call us now to book an appointment to start the process. It is your first step to a better retirement.