Perfect Time To Review Your Pension Arrangements?

By Comron Rowe, pensions specialist at Truro law firm Foot Anstey Hancock Caffin

Saving money and giving staff more cost effective benefits could be achieved with a review of a business’ existing pension arrangements for employees.  Saving money in the current economic downturn has got to be on every business’ agenda.

So what questions should the review include?

• Do we provide employees with final salary pension benefits? If so, what are the expected costs to the business?  Do we want to continue providing these benefits in the future?
• Do we pay employer contributions to a money purchase (otherwise known as a defined contribution) pension arrangement? If so, how much and what is the industry standard? Do we want to change these arrangements going forward?
• If we pay employer contributions to a money purchase pension arrangement, such as a group personal pension plan or stakeholder pension plan, when was the last time we reviewed our pension provider’s charges? How do these charges compare to their competitors?
• If employees contribute to a money purchase pension arrangement is this contribution paid directly or through a “salary sacrifice” arrangement with the business? If it is paid directly, do we want to consider changing to a salary sacrifice arrangement to help reduce our national insurance contributions?

Looking at these questions shows just how many things a business might want to consider in a review of its existing pensions arrangements. The possible  changes, if any, will depend on the terms of employees’ contracts of employment and the rules of each particular pension arrangement.

We are happy to review your existing employment contracts and pension arrangements and advise on changes  your business might want to consider taking. We can also refer you to benefit consultants who can compare the market and recommend the most suitable pension products for your business.

If you have any questions please contact:

Comron Rowe or Patrick Howarth on 01872 243300

Published 24/02/2009. The author of this article is Comron Rowe