Understanding Group Pension Plans: A Guide for Employers

A Group Pension Plan is a pension scheme provided by an employer for its employees, serving as a tax-efficient means of ensuring financial security in retirement. At Oaktree Financial Services Ltd, we can help you navigate the various types of pension arrangements available and establish a Group Pension plan tailored to suit your business needs.

Mandatory PRSA Access and the Benefits of Offering a Group Pension

Under Section 121 of the Pensions Act, employers must offer employees access to a Personal Retirement Savings Account (PRSA), though contributions from the employer are not mandated. However, providing a comprehensive benefits package that includes a Group Pension can significantly enhance your offering to employees.

You might be contemplating waiting for the implementation of the auto-enrolment pension scheme. While auto-enrolment represents progress, alternative options can provide more substantial benefits to both employers and employees. Additionally, past delays in the introduction of auto-enrolment highlight the uncertainty regarding its expected timeline in September 2025.

Why Offer a Group Pension? 

1. 1. Attracting Key Employees: Offering a pension and risk benefits package is one of the most effective strategies to attract top talent and stand out against competitors. 
   2. Staff Retention: A Group Pension arrangement demonstrates that the business values its employees, fostering a sense of commitment. Some plans allow for recouping employee contributions if they leave within a specified period, encouraging retention.
   3. Tax Efficiency: Employer contributions benefit from tax relief against corporation tax, while individual employee contributions qualify for tax relief at the employee’s marginal income tax rate.

Oaktree Financial Services: Supporting Your Employees 

• • Scheme Setup: We understand the unique needs of your business and can help identify the most suitable pension structure. Our services include tendering the scheme to the market and offering a comprehensive proposal. We also provide on-site presentations and individual meetings with employees to explain the plan. 
  • Financial Review: Pension funding should align with each employee’s overall financial strategy. We analyse employee situations, provide impartial advice, conduct risk profiling, and recommend appropriate pension contributions to meet retirement goals. 
  • Retirement Options: Upon leaving employment, employees will have several options regarding their accumulated pension funds. We assist in clarifying these options and outlining the advantages and disadvantages of each choice. 

Group Risk: Protecting Your Most Valuable Asset 

Recognising employees as vital assets, Group Risk plans offer financial protection for employees and their dependents in the case of serious disability or death. 

Types of Group Risk Plans 

1. Death in Service Benefit Plans: Provide a lump sum or pension to an employee’s dependents if the employee passes away while covered under the plan. 

1. 1. Income Protection Plans: Offer income if an employee cannot perform their role due to illness, injury, or accident. These plans can include Premium Protection, ensuring that both the employer’s and the employee’s pension contributions continue during the employee’s absence. 

Why Offer Group Risk Benefits?

• • Attracting Key Employees: Work as a powerful recruitment tool. 
  • Staff Retention: Show commitment to employee welfare. 
  • Tax Efficiency: Enhance the overall benefits package. 
  • Cost-Effective: Group Risk benefits are relatively inexpensive for employers to insure, providing valuable financial protection for employees and their families. Employer-sponsored schemes often allow employees access to coverage at reduced rates or free, as they are covered under a single Group policy. Additionally, medical underwriting is rarely required for coverage.

   

If you’d like to learn more about Group Pension and Risk Benefits, call us at 025-30588 or book a complimentary consultation. Whether you want to review your current plan or need assistance setting one up, we are always here to help you.