A Guide to Group Pension & Risk Benefits

 A Group Pension Plan is a pension provided by an employer for its employees. It is a tax-efficient way to help employers ensure that their employees are financially secure in retirement. 

Oaktree Financial Services Ltd can explain the differences between the different types of arrangements, and also facilitate the establishment of  Group Pensions which would best suit your business. 

Under section 121 of the Pensions Act, employers are required to offer their employees access to a Personal Retirement Saving Account (PRSA), however, the employer does not have to contribute. Offering a more comprehensive benefits package can have lots of advantages for employers. 

If you don’t have a plan set up, you might be thinking why not wait for the auto-enrolment pensions scheme to come into effect? Auto-enrolment is a good step in the right direction, but there are much better alternatives available that will benefit both employers and employees much more. Also, auto-enrolment has been postponed before, so there is no guarantee that it will definitely be in place in January 2024.

Why Offer a Group Pension? 

• Tool for attracting key employees – One of the most effective ways to attract employees to a business is by offering a pension and risk benefits package. This can give you as an employer the edge over a competitor in terms of recruitment.
• Tools for staff retention – By putting in place a group pension arrangement, it promotes an image that the business cares about its employees. It shows a level of commitment that you want the employees to remain in the company for the longer term. Some arrangements allow for any employee contributions to be recouped should the employee leave the company within a certain time frame which gives the employee an incentive to remain with the company. 
• Tax efficiency – Contributions made by employers receive tax relief against corporation tax. Contributions made by an individual employee to the group scheme are allowable for tax relief at the individual’s marginal income tax rate only.

What Services Does Oaktree Financial Offer Your Employees? 

• Setting up the scheme –We have experience in understanding an employer’s needs and can help you identify the best fitting pension structure for your company. We will tender the scheme to the market and provide a full proposal for you. We will provide an on-site presentation for your employees with one-on-one meetings. 
• Financial Review – Pension funding should be part of an employee’s overall financial plan. We can analyse each employee’s unique situation and offer impartial advice. We would carry out risk profiling with employees and recommend pension contributions which will help achieve their retirement funding target. 
• Retirement Options – When an employee leaves employment, they will be offered a number of leaving options with regard to their accumulated pension fund. We can help employees understand these options and explain the advantages and disadvantages of each option. 

Group Risk 

Employees are the most important asset to a business. Protecting them has long been recognised as an essential business activity. 

Group Risk enables you to provide your employees and their dependents with financial assistance if an employee should become seriously disabled or dies. 

There Are 2 Types Of Plans Which You Can Provide: 

• Death in Service Benefit plans - can pay out a lump sum and/or a pension to an employee’s dependant (spouse / civil partner / other dependant) if an employee should die while covered under the plan. 

• Income Protection plans - will pay an income to you if an employee is unable to do their own job due to illness, injury, or accident. The Income Protection plan can include Premium Protection which means both you and the employee’s pension contributions are maintained while the employee is unable to work. 

Why Offer Group Risk Benefits? 

• Tool for attracting key employees
• Tools for staff retention
• Tax efficiency
• Cost Effective - The benefits achieved under Group Risk cover are highly valued as they provide financial protection for employees and indeed for their families, yet they are relatively inexpensive for employers to insure. Employer sponsored schemes can give employees access to insured protection cover either at a reduced rate or free of charge as they are covered under one “Group” policy. Because of the nature of Group risk cover – cover is more readily available to any employee, given that each member rarely has to go through any medical underwriting. 

If you would like to learn more about group pensions and risk benefits, call us on 025-30588 or book a complimentary chat. Whether you want to review your current plan, or need help setting one up, we are always happy to help.