How to manage employee retirement benefits in a changing business landscape

With ongoing changes in the UK’s business environment, managing employee retirement benefits is a balancing act.

If you’re looking to ensure your employees get the best deal while keeping your business on track, you’re not alone. Here’s a look at key changes and best practices to stay ahead of the curve.

Navigate the auto-enrolment review

The UK government has been considering reforms to the automatic enrolment system. There’s talk of lowering the minimum enrolment age and removing the lower earnings limit for qualifying earnings.

Aligning the earnings trigger with the NI Lower Earnings Limit would increase total contributions by £78million. These changes could require companies to adapt pension schemes to cover a wider range of employees.

Keeping up with these developments will help your business stay compliant with any new rules.

Strengthen your pension scheme governance

When it comes to managing pension schemes, strong governance is crucial.

You may choose to promote senior finance team members or consult independent advisors. The wider process includes making sure your pension plans comply with regulations and serve your employees’ best interests.

Regular checks, strong internal controls, and a process for identifying and managing risks will help things run smoothly.

Legacy Defined Benefit Pension Schemes

The UK pensions landscape is dominated by defined contribution (DC) schemes but there are around 4,500 provate sector defined benefit (DB) schemes in existence. Many of these now find themselves with assets that exceed the liabilities in the scheme. The Government is looking at ways to make it easier for employers to unlock this surplus, with one potential use being to augment benefits for current employees.

If you have a legacy DB pension, consulting specialists in Defined Benefit pension schemes could help you help your current employees save for their future.

Adapt to changing patterns

There are 22 million people over 50 in England. That’s around two in five of the population. With people working for longer, your pension offerings need to evolve.

Flexible retirement options are important, so support employees as they transition into retirement. Whether it’s phased retirement or part-time work, it’s something worth considering.

Enhance your communication

Clear communication about pension schemes is vital for employee satisfaction. Inform your team about changes to retirement benefits, so they can make better decisions for their future.

The more engaged your employees are with pension plans, the more likely they are to value and appreciate the benefits on offer.

Be proactive, so you can work towards stable futures for employees and keep your business competitive and compliant.

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