The Department for Work and Pensions has announced that from April 2015 all new and existing workplace pension scheme charges will be capped, with the annual management charge (AMC) set at no more than 0.75%. Some pension providers have warned that the cap could lead to less choice for employers and employees alike, while others have suggested it could benefit savers to the tune of thousands of pounds a year. But what does this really mean for Britain’s small businesses and those who work for them? The AF Pension Service can provide personal and independent advice to help you through the minefield of new rules and regulations.
Making it simpler
The government is bringing in the new rules to make the process of auto enrolment in workplace pensions simpler and fairer. Under the new rules, pension schemes are to be re-priced by providers on an individual basis, and all charges are to be applied at a flat rate with the removal of discounts and rebates.
In a small number of cases it may not be possible for pension providers to provide a qualifying workplace scheme for 0.75% or less. In these cases some pension providers may introduce an employer charge to make the pension scheme financially viable. Where the charges are currently covered by both the employer and the employee, the charge will now become the responsibility of the employer only.
Don’t wait too long
With nine million people expected to join ‘workplace pension’ schemes over the next five years, many small businesses aren’t giving themselves enough time to prepare to meet their legal obligations as their staging date approaches. And although it’s hard to predict which providers will be offering auto enrolment products by next year, the longer you leave it the less choice you’ll have.
Since the introduction of auto enrolment in 2012, The AF Pension Service has helped members access a number of bespoke schemes, and work closely with several pension providers to give the best possible service.
We recommend having a provider in place 9 -12 months before your staging date. For more information on making the most of the pension’s service offered as part of your Affinity membership contact Richard on 01603 881874.