The Pensions Regulator has published additional guidance for business advisers helping their clients to select a pension scheme, as well as an ‘at a glance’ PDF guide. Available on the Pensions Regulator website, there is guidance on the following topics:
Choosing a pension scheme
Your role in helping a client to choose a scheme
What to consider when choosing a scheme
Find a new pension scheme for clients
At a glance PDF guide
Helping your clients to choose a pension scheme 12 October 2015
Choosing a workplace pension scheme is one of the key tasks that an employer with staff to automatically enrol will need to undertake in order to comply with their workplace pension duties.
The Pensions Regulator (TPR) has provided an overview of the main areas of consideration.
Research from TPR shows more than 70% of small and micro employers are likely to ask their business advisers for help with their duties.
Employers will need to either set up a new scheme or check their existing scheme meets certain criteria. Ultimately, it’s the employer’s legal responsibility to choose a pension scheme.
How business advisers can support their clients
Business advisers can help their clients by:
providing factual information including offering a comparison of the schemes’ investment funds, charges and services; recommending a specific pension scheme to employers for automatic enrolment; referring clients to another adviser or to a pension scheme selection tool. It is important to note that business advisers need to be authorised to give certain advice. While they can provide investment advice to an employer choosing a pension scheme for automatic enrolment, they should only provide investment advice to an individual if they have the appropriate authorisation from the Financial Conduct Authority. It may not always be clear whether a client is seeking advice as an employer or an individual, for example if the client is thinking about joining the scheme themselves. Advisers may want to specify in their letter of engagement that any advice provided is in the client’s capacity as an employer and not as an individual.
Advisers who belong to a professional body should refer to its ethical standards, and make sure that any automatic enrolment work carried out is covered by their professional indemnity insurance.
More information on how you can help your clients to choose a pension scheme can be found here.
What to consider when looking for a pension scheme
The type of scheme most likely to be available to your client is a defined contribution scheme run by a large, specialist provider that is designed to be used by many different employers. These include master trusts that are run by a board of trustees and group personal pensions that are run by financial service companies such as insurance companies and investment managers.
These schemes generally cost less and require less involvement from the employer compared to other schemes. More information on the options available can be found here.
There are a number of factors to consider when recommending a pension scheme. Some features, for example letter translation services, may be more relevant to specific employers than others. TPR has produced an ‘ at a glance ’ summary to help with this task.
Tax Relief
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