Did you know 19% of the UK working age population say they have no form of private or workplace pension.[1]
All employers must offer a workplace pension scheme and with auto-enrolment the government set the legal minimum contribution levels for both employee and employers. Last week was Pension Awareness Week and we want to highlight the benefits of offering a good workplace pension scheme. Can you take a standard pension scheme and make it into a great employee benefit which sets you apart from your competitors?
You can and this blog sets out some quick examples of things you can do differently with workplace pension schemes which enhances your reputation as a great employer while not greatly increasing costs. Offering a good workplace pension can help you to stand out from your competitors and gives employees an added incentive to stay with you. It is hard to hold onto good employees in the current climate, with lots of potential opportunities for employees at present and having the advantage of a good workplace pension scheme may make the difference.
There are ways you can utilise your current scheme to offer more for employees without the need to inject a lot of cash into your scheme, bearing in mind that you may not have additional funds to draw on.
- 1. Make access to the pension scheme a day one right. If you allow employees to join the scheme from day one. Employees will be more likely to stay in a pension scheme if they are enrolled into it from the beginning of their employment and have never received a salary without any pension deductions. You will also cut down on the administration related to entry into a pension scheme.
- 2. If you use a ‘salary sacrifice’ arrangement for pensions, there are savings for both the employee and the employer – if you make pension contributions on behalf of your employee you will not pay national insurance on these amounts, and the employee will have tax and NI savings Just be careful that this arrangement doesn’t reduce the employee’s salary to below the National Minimum Wage minimums.
- 3. Another idea which is easy to arrange with your pension provider is to swap the auto enrolment minimum amounts that the employee and employer pay into the scheme. In the standard arrangement the employer pays a lower percentage than the employee. This will make you stand out from the crowd as an employer and reflects well on you.
Do you support your employees to make informed decisions with their pension pot?
As the cost of living continues to rise there may be some employees who are looking at their pension contributions and wondering if this money would be better spent today rather than saving for the future. As an employer you can help employees to see the benefits of utilising the workplace pension scheme by delivering informative communications.
Most pension providers offer support with employee communications, and some will offer in-house financial workshops or consultations to discuss pensions and savings for retirements. These can help to engage employees and increase understanding of why paying into a pension plan is such a good idea.
A great source of advice for your employees about their pensions is the Pension Wise Service [2]. They are a government funded body which has an aim of ensuring people can access high-quality money and pensions guidance and debt advice throughout their lives, how and when they need it. A key service they provide to over 50s is a free pension review.
The Green Pensions Charter
Ikea, Brewdog and Oxfam are existing members of the Greens Pensions Charter and have committed to their pension schemes working towards net zero emissions targets. Recently Marks & Spencer’s and Co-op have committed to go green with their pensions by aiming to halve the emissions of their investments by 2030 at the latest.
Working towards a green pension scheme can be communicated as part of your internal and external marketing and any recruitment campaigns to demonstrate that you are a forward-thinking organisation. Research shows the younger workforce care about sustainability and showcasing a green pension scheme can help you stand out from the crowd.
You can do a lot within existing workplace pension schemes to engage employees and showcase yourself as a good employer.
Albany HR, your outsourced HR Partner, has a team with over 50 years’ combined experience. We help you succeed through your people and can assist in all areas of HR including:
- People Strategy
- Recognition & Reward
- Employee Relations
- Employee Wellbeing
- HR Policies & Employment Contracts
Get in touch to discuss if our services can support you. Email us at letstalk@albanyhr.com or call for a chat – 0131 364 4186.
#PensionAwarenessWeek #SMESupport #AlbanyHR #financialwellbeing
[1] https://www.finder.com/uk/pension-statistics#:~:text=Key%20statistics%201%20The%20UK%E2%80%99s%20average%20pension%20pot,have%20a%20workplace%20pension%20but%20no%20private%20pension
[2] https://www.moneyhelper.org.uk/en/money-troubles/way-forward/