Automatic Enrolment of employees into their company’s pension scheme has been mandatory since October 2012. Since that date, all employers must provide a pension scheme for their employees. But employers’ responsibilities don’t stop there. Once they’ve provided a scheme, employers are legally obliged to regularly monitor it to ensure that it continues to be appropriate and offers good retirement outcomes for its members.
According to the Pensions Regulator, “Good governance is the bedrock of a well-run pension scheme”. A clear link has been established between good governance and good fund performance so it’s seen as an essential part of effective scheme management.
To help managers set up and administer corporate pension schemes in a way that ensures members get the best outcomes for their retirement, the Regulator has developed six key elements to be included in the design, set up and ongoing operation of corporate schemes.
- Schemes must be designed to be durable, fair and deliver good outcomes for their members. There should also be transparency around any costs or charges that will be made.
- All parties involved in managing a company pension scheme should have clearly defined roles and must continually carry out these roles to a highly competent level.
- Those with a defined role should be accountable and have the necessary resources to carry out their duties effectively.
- Pension schemes are long-term in nature, so corporate schemes must benefit from effective ongoing governance, monitoring and internal controls. The best interests of members must always be uppermost.
- Schemes should be well-administered with timely, accurate and comprehensive processes and record keeping in place.
- Communication to members should be designed and delivered in a way that enables members to make informed decisions and choices about their retirement savings.
The Regulator does make spot checks from time-to-time to ensure that employers are adhering to pension regulations. Those who fail to comply could be issued with penalty notices, fined or even prosecuted for continued non-compliance.
Brunsdon Financial provides Group Pensions Schemes to many organisations, from SME businesses to large corporates. When implementing a new scheme, we will always make recommendations regarding the ongoing management of pension arrangements, or we can review and make recommendations on any schemes already in place.
Once you become a client of ours, we will regularly monitor and review your scheme to ensure it is working well and is cost effective. We’ll also make sure it continues to meet the requirements of the Pensions Regulator.
Alternatively, you can outsource all or some of your governance and administration responsibilities to us.
Please contact us for further information and advice on any aspect of your group pension scheme.