Analysis – Page 10
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AnalysisA quick guide to employee benefits tax
Tax-efficient benefits offered through a salary sacrifice arrangement are exempt from income tax, employer’s NI and employee’s NI. This is so because a benefit offered in this way reduces an employee’s pay, so less tax and national insurance is due and the employer will not have to pay NI contributions ...
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Analysis
What are the legal requirements for auto-enrolment communications?
Communication must include:A statement that the employee has been, or will be, automatically enrolled into a pension scheme.The enrolment date.Details of the pension scheme provider.The value of both employer and employee contributions.If it is a defined contribution pension scheme, the employer must advise staff of the phased increases as a ...
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AnalysisCommunication strategies to engage staff with pensions auto-enrolment
If you read nothing else, read this…When communicating auto-enrolment, employers must remember their audience, make it relevant and start early, using various communication methods.Communications must be tailored to individual employees. Technology is a key factor in engaging staff with auto-enrolment. Before communicating the details of how auto-enrolment will work and ...
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AnalysisHow much pension fund choice should employers offer their workforce?
If you read nothing else, read this…Evidence shows that the greater the choice of pension funds, the less engaged employees may become in the scheme. Some employees in some market sectors, such as financial services, will always be more engaged than others. Many employers just want to get through auto-enrolment ...
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AnalysisInterview with Sally Purbrick, head of reward, Anglian Water
“The days have gone in Anglian Water when the traditional HR department was just seen as something that brings people into the organisation and pays them,” she says.“It’s about the value we can bring. Specifically, the reward area, and our strategies around linking personal performance to reward, pushes the reward ...
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AnalysisAre default investment funds fit for purpose?
If you read nothing else, read this…Employers must offer staff a default fund under auto-enrolment legislation.But the funds are, arguably, not fit for purpose because of their legacy issues and restrictive asset allocation.Regulatory guidance on default fund governance should help default funds to evolve.Pensions auto-enrolment has been dubbed one of ...
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AnalysisWhat should future default fund strategies look like?
If you read nothing else, read this…The default fund strategy of the future should be flexible enough to address employees’ diverse retirement income needs.Asset allocation should be more diverse and include illiquid assets, such as property.But employers must focus on employees’ retirement income, rather than investment returns.Flexibility should be at ...
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AnalysisTop tips for managing default fund strategies
If you read nothing else, read this…Employers should start by identifying their employees’ retirement needs.Employers have a duty of care to ensure employees are financially able to retire.This requires employee education and engagement.Workforce needsEmployers should start by identifying the retirement income needs of their workforce.Andy Dickson, investment director, UK institutional ...
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AnalysisHow should employers communicate default funds?
If you read nothing else, read this…Employers must be honest with staff about their savings goals.Employees need to understand how long they may need to work to afford their desired retirement lifestyle.Employers should remove all jargon from their communications.Simon Chinnery, head of UK defined contribution (DC) practice at JP Morgan, ...
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AnalysisHow do bespoke and off-the-shelf default investment strategies compare?
If you read nothing else, read this…Off-the-shelf default investment strategies are more common in contract-based defined contribution schemes.Off-the-shelf plans have less governance responsibilities for employers.Bespoke strategies give employers more flexibility in their investment management.The structure of a default strategy is determined by various factors, such as whether a pension scheme ...
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AnalysisCurrent state of play for workplace pension charges
If you read nothing else, read this…The Department for Work and Pensions’ consultation on pension charges includes the introduction of a 0.75% cap on charges, a ban on active-member discounts and an extension of the ban on consultancy charging to include all DC pensions, rather than just auto-enrolment schemes.Charges should ...
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Analysis
Back to basics on balanced managed pension funds
If you read nothing else, read this…Balanced managed funds invest across a small range of asset classes.Transparency in financial services has led to many providers closing or rebranding their balanced managed funds.Balanced managed funds are gradually being replaced by the likes of diversified growth funds.Employers have, by and large, complied ...
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AnalysisFacts and figures on pension schemes
What employers are doing around pensionsTesco pension deficit rose to £2.4 billion.Barbon Insurance took steps to boost pension saving.BMW consulted on DB pension closure.Siemens UK boosted pensions take-up to 98%.Read the digital edition of the Pensions supplement 2013
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Analysis
Contract-based pension scheme comparison table
The plans, set up by employers, include group personal pensions (GPPs), stakeholder schemes and self-invested personal pensions (Sipps), and vary in terms of, for example, contribution levels and investment limits.Read on to find out how each scheme rates. Group personal pension (GPP)StakeholderSelf-invested personal pension (Sipp)Definition:This is an arrangement made ...
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AnalysisThe challenges of auto-enrolling weekly-paid employees
If you read nothing else, read this…Weekly-paid employees’ eligibility for auto-enrolment is prone to change frequently because of their fluctuating pay.Employers’ payroll teams face increased workloads because of this fluctuation.HR and pensions teams need to support payroll providers to manage the workload.There have, of course, been challenges, not least of ...
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AnalysisDe-risking pension investments in the run-up to retirement
If you read nothing else, read this…Members of DC pension schemes face critical investment choices in the run-up to retirement.Employers can provide financial guidance to help employees make informed decisions.Employees can choose different investment approaches based on level of risk.However, the numbers are set to rise. Some 400,000 people applied ...
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AnalysisHow to strike the right balance of risk in default investment strategies
If you read nothing else, read this…After auto-enrolment, the regulator is becoming increasingly involved in the investment range and default funds on offer in workplace pension schemes.Most schemes use lifestyle funds, some of the traditional weaknesses of which can be overcome by using diversified, and often highly active, multi-asset investment ...
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AnalysisAuto-enrolment tips for smaller employers from larger firms
If you read nothing else, read this…Employers should be realistic about their auto-enrolment budget.Planning ahead can help avoid potential problems.Postponement can give smaller employers breathing space.More than half (55%) of employers that responded to Employee Benefits/Capita Pensions Research 2013 and have auto-enrolled their workforce recommend that smaller employers start planning ...
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AnalysisHow employers can link benefits strategy to employees' needs
If you read nothing else, read this…Most employers do not ask their employees about their benefits needs.Employees often do not understand their own needs.Social media is a powerful tool with which to identify employees’ needs. Nick Throp, co-founder of Like Minds, says: “Employers tend to look at indicators like benefits ...
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AnalysisWhat employers need to know about DC governance post auto-enrolment
If you read nothing else, read this …A good starting point from which to consider a high-quality, long-term DC pension is The Pensions Regulator’s Six principles for good workplace DC.Employers should consider setting up a governance committee to monitor the scheme.It is important for employers to keep track of opt-outs, ...