Today marks the end of this year’s Pensions Awareness Week, which aims to promote understanding and engagement amongst pension savers.

This can only be a good thing and must be encouraged. But what about employers? In this blog, I highlight some things that employers can do to ensure they stay on top of their pension responsibilities and help their employees to do so too.

Promoting pensions to your employees

As an employer, you are uniquely placed to encourage the next generation to save appropriately for their retirement. While you need to be careful not to provide advice (which is a regulated activity and should not be carried out without proper authorisation), signposting information and support to employees can be incredibly helpful. I’ve seen employers arranging financial health check sessions with an advisory company or asking their pension provider or benefit consultant to give staff a presentation on their benefits: both great ways to spread awareness and help foster an engaged workforce.

Consider a pensions health check

Auto-enrolment (AE): there is often a misapprehension that because everyone does it, it must be easy. In fact, AE problems are very common and come across my desk frequently. Issues that crop up particularly often are employee eligibility (including the assessment of whether someone constitutes a “worker” for AE purposes); managing member opt outs and postponement; and the calculation of contributions. Failing to meet your AE obligations can not only damage your relationship with employees, but also puts you at risk of regulatory action from the Pensions Regulator. A periodic health check is a good idea, and we can help you carry one out.

Are you using salary sacrifice?

Salary sacrifice (otherwise known as “salary exchange”) is a way of making pension contributions which is tax efficient for many employees. Most schemes will offer this option, but it’s important that salary sacrifice is effectively documented to ensure that tax savings are validly obtained. An improperly implemented salary sacrifice arrangement can result in unexpected tax liabilities and investigations by HMRC. We can help you keep on the right side of the law, from preparing the necessary contractual variations to advising on whether arrangements are compliant with the broader AE regime.

Is it time to make a change?

From time to time, employers may want to make changes to their pension provision. This might include switching pension providers, changing the level of contributions payable to their scheme, or making changes to how contributions are calculated. Where an employer has distinct groups of employees, they might want to harmonise pension provision between them to minimise administrative burdens or to promote employee morale. Change can be a good thing, but before implementing any pension related changes, you should check whether a statutory consultation obligation might apply.

Long lost schemes

Many employers still have historic pension schemes on their books - perhaps a closed DB scheme or a small SSAS scheme used for employees who have long since left the business. Seek advice if you’re unsure about what to do with these schemes – there are lots of options available for minimising risk and maximising efficiency. Scheme buy-outs, mergers, and member incentive exercises are just some of the tools that can be used to ensure an old pension scheme doesn’t keep you awake at night.

What’s coming over the horizon?

Pensions legislation is in a constant state of flux. Whether it’s the removal of the lifetime allowance or the proposed expansion of the AE regime, there is always something employers need to know. We can help employers navigate the ever changing pensions landscape. If you have any concerns about upcoming changes in legislation, or just need a bit of a debrief on what’s going on, please just pick up with your usual pensions team contact.

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