A group personal pension scheme, otherwise known as a workplace pension, is a defined contribution pension run by a pension provider on behalf of an employer.
A provider runs the scheme in line with the government’s requirements and ensures you meet your legal obligations in providing a workplace pension.
But what is a group pension scheme and how do you set one up?
In this guide we will tell you everything you need to know so you can make the best decisions when it comes to setting up a pension scheme for your employees.
What Is A Group Personal Pension Scheme?
A group personal pension scheme, otherwise known as a workplace pension, is a defined contribution pension run by a pension provider on behalf of an employer. A provider runs the scheme in line with the government’s requirements and ensures you meet your legal obligations in providing a workplace pension.
Having a group pension scheme in place enables your employees to save for their retirement throughout their employment. The savings they make, along with contributions made by you, their employer, get invested into a mix of investments, stocks, and shares to help it grow over time.
Once employees hit retirement age, they can then take money out of this pot and use it as they wish.
It’s important to note that as an employer, legally, you must provide a workplace pension scheme as soon as your first employee begins working for you.
Danielle Hines
Employee Benefits Consultant at Drewberry
Advantages Of A Group Personal Pension
Although setting up a group pension is a legal requirement for employees, there are a number of benefits to having one. These include:
- Employee contributions attract income tax relief
- Employer contributions are eligible for tax relief
- May qualify for capital gains tax and income tax relief
- An attractive pension scheme can help recruit and retain staff
- It should be available as part of a salary sacrifice scheme
- Extra benefits can be added for a small charge, such as death in service.
