Know the basics before you start choosing a pension provider for your Auto – Enrolment.
In our last post we had a look at the steps you need to take as you start preparing for Auto Enrolment and inevitably that means you also need to start making a short list of pension providers. Possibly the most important part of getting ready, in this first of two blogs, we outline the basic and legal requirements that you need to know when it comes to getting started.
The legal requirements
It may sound obvious but when considering a pension make sure that it meets the following requirements:
- Employee’s consent is not required to enrol them.
- Employees are allowed to join from their first day of employment.
- The provider is tax registered in the UK.
- The scheme allows for the minimum legal contribution under Auto Enrolment.
- The provider is authorised or approved.
But what about NEST?
NEST (National Employment Savings Trust) is a government backed workplace pension. Although it’s very much an entry point scheme, and can look tempting to employers, it’s not always the best option so it’s really important to take advice if you’re already thinking about NEST as a workplace pension for your business. The main issues in respect of NEST are:
- Capped contributions – NEST’s annual contribution limit is the maximum amount that can be contributed to any member’s retirement pot in a tax year. The contribution limit for the 2015/16 tax year is £4,700 which may be insufficient for higher earners.
- Transfers – You cannot transfer any previous pensions you have built up into NEST or transfer your NEST savings to a different scheme.
- Charges – Although NEST is widely accepted as having low charges, NEST has two types of charging and therefore is not always as straight forward as you may think.
It is important to note that some of the restrictions regarding NEST may be removed in 2017.
If you have any doubts about choosing a provider, what the requirements are, what to ask, what to look for or simply how to go about it, why not call us. We know it can be time consuming and a quagmire of confusing information. But we offer a free consultation and can cut through the complexities, identify a suitable provider and implement, manage and communicate the entire thing for you. And what’s more we do it in plain English so that everybody understands and we may even be able to improve the ROI of the scheme for you too.
Do you need help choosing your pension provider for Auto Enrolment? Call us today on 01932 259939 for some straight forward advice or assistance, and sleep better tonight. Because we really can take the headache out of Auto Enrolment.