An important area of advice that we provide is in relation to where the pension scheme fits into a company’s structure-what it can gain from it and what risks are associated with it. As good occupational pension schemes become even scarcer, they are starting to be more highly valued by employees and can be a differentiator from the point of view of attraction and retention of staff. However, a company must be aware of the costs and risks associated with any particular approach to pensions, and these must be weighed-up against the advantages gained from offering them. In addition, the cost of any pension arrangement has to be incorporated into the overall employee remuneration package and structure.
There are many different approaches to pensions nowadays; having moved more from defined benefit to defined contribution, there is interest in risk shared approaches and also the possibility of non-UK-based pension schemes. Each of these have a role in the right organisation and for the right group of people. In particular, given the increasing limitations placed on contributions to registered pension scheme by HMRC, there is an increasing role for looking at schemes other than registered pension schemes for senior employees, including Employer Financed Retirement Benefit Schemes (EFRBS), Recognised Overseas Pension Schemes (ROPS) and modern unfunded arrangements. In a number of organisations, we would also question whether a traditional funded scheme is the best approach from the employer’s perspective?
At all times, the organisation needs to deal with current and forthcoming legislative requirements including stakeholder and NEST and we will advise organisations how to deal with such requirements.