By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants.
Turn on the TV, listen to the radio, or open your tablet computer or newspaper and you’ll find pensions are always in the news.
Pensions are an important consideration for all – and they become much more important the older you get.
But what are the rules?
Employers can help promote retirement benefits for their employees in a number of ways, including occupational schemes.
Occupational pension schemes require the establishment of a trust in order to gain the tax advantages and to ensure that the assets of the pension scheme are kept separate from those of the employer.
The team at Clay Shaw Butler produce regularly-updated factsheets on the main responsibilities of occupational pension scheme trustees.
If your business is in West Wales, we can advise you on the accounting and audit requirements of your scheme.
Many employers offer their staff an opportunity to save for their retirement through an occupational (or company) pension scheme.
Those employees who join the scheme need to have confidence that the scheme is being well run.
The role of pension scheme trustees is very important in ensuring that the scheme is run honestly and efficiently and in the best interests of the members.
The Pensions Act 1995 (the Act) brought about a number of major changes to the way occupational pension schemes are run. The 2004 Pensions Act brought about further change and introduced, in April 2005, The Pensions Regulator (TPR) as the UK regulator of work-based pension schemes.
TPR has an important role in the pension sector.
Its objectives, as set out in legislation, are to:
- protect the benefits of members of work-based pension schemes
- protect the benefits of members of personal pension schemes (where there is a direct payment arrangement)
- promote, and to improve understanding of the good administration of work-based pension schemes
- reduce the risk of situations arising which may lead to claims for compensation being payable from the Pension Protection Fund
- maximise employer compliance with employer duties and the employment safeguards introduced by the Pensions Act 2008
- minimise any adverse impact on the sustainable growth of an employer (in relation to the exercise of the regulator’s functions under Part 3 of the Pension Act 2014).
TPR has three core powers that underpin its regulatory approach:
- investigating schemes by gathering information that helps them identify and monitor risks
- putting things right where problems have been identified
- acting against avoidance to ensure that employers do not sidestep their pension obligations.
In fulfilling its role, TPR produces important guidance for those involved with pension schemes including trustees as well as auditors and actuaries. This guidance is available from TPR’s website.
The Pensions Act 2008 introduced a requirement on UK employers to automatically enrol all employees in a ‘qualifying auto-enrolment pension scheme’ and to make contributions to that scheme on their behalf. Enrolment may be either into an occupational pension scheme or a contract based scheme.
Many contract based schemes are group personal pensions where an employer appoints a pension provider, often an insurance company, to run the scheme. The National Employment Savings Trust (NEST) is a government backed pension scheme that employers can use for auto enrolling employees.
Compliance with the regulations started from 2012 for the largest employers.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) –
We have a strong and experienced team with great local knowledge all geared-up to helping you get the very best from your finances – whether that is as an individual or as a business.
We stay ahead of the game by putting great store by continual professional development for our staff.
With Investors In People status at Clay Shaw Butler, we care passionately about making sure our staff have all the tools they need to serve you, our customers.
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The team at Clay Shaw Butler can be contacted on 01267 228500.
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