Group Pension Plan
Growing together for successWhat is a group pension?
A group retirement plan is set up by an employer for employees as a workplace benefit.
Employers offer the plan because their contributions are tax-deductible, and the plan acts as an employee incentive.
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Why have a group pension?
Offering a group retirement and savings plan can be an affordable and effective way to attract, motivate and keep employees, while helping them save for their retirement. But it’s not just about your employees. There are real benefits to your company when you offer a plan.
How does it work?
A group personal pension scheme is run by a pension provider that your employer chooses. But your pension is an individual contract between you and the provider.
Your employer will normally contribute and you’ll often be asked to contribute too.
Your employer sets the contribution amounts. They’ll give you details when you’re asked to join the scheme.
There are minimum contribution amounts though.
You’ll get tax relief on contributions you make to a group personal pension. This is money that would otherwise have gone to the government as tax.
In a group personal pension, the provider will always claim tax relief on your contributions from the government at the basic rate. They’ll then add this to your pension pot.
If you’re a higher or additional-rate taxpayer, you’ll need to claim the additional relief through your tax return.
Benefits from a business perspective:
Tax Benefits.
With some products you can deduct administrative fees as a business expense.
Reduce Payroll Expenses.
Contributions to a deferred profit sharing plan can, in some cases, reduce your payroll expenses.
Simplified Plan governence.
While there are certain responsibilities that come with offering a group retirement and savings plan, we simplify the process to help make sure your plan is compliant.
How your group pension grows.
Your pension contribution is usually invested in stocks and shares, along with other investments. The aim is to grow your pension contributions over the years before retirement.
There’s no tax paid on the growth or income from investments in your pension pot.
You can usually choose from a range of funds to invest in. So you can choose one, or a number of funds, that best meet your needs or circumstances.
If you don’t choose when you first join the pension, your money will be invested in a fund chosen by the pension scheme. It might be referred to as a ‘default’ fund and will be designed to suit a broad range of people.
If your money is invested in a default fund, it might be put into a lifestyle fund. This is a retirement fund that works by moving your money into lower-risk investments as you approach retirement.
