Auto-Enrolment: A Stepping Stone, Not the Destination
BWFS
On Wednesday, 27th March, the Cabinet gave the green light to a Bill to establish an Auto-Enrolment pension scheme for workers in Ireland with a view to it commencing on 1st January next.
Auto-Enrolment is a positive development, encouraging a culture of saving for retirement in Ireland. However, it’s important to understand the full picture when it comes to employee pensions. While Auto-Enrolment provides a baseline, a company-sponsored occupational pension scheme can offer significant advantages for both your business and your staff.
Let's acknowledge the benefits of Auto-Enrolment. It's a straightforward system in theory, with minimal administrative burden for employers. The government-backed scheme handles many complexities, leaving you free to focus on running your business.
While Auto-Enrolment gets people saving, employers can offer a more attractive package through a company pension scheme. Here's how:
: Auto-Enrolment contribution rates are predetermined and gradually increase. A company scheme allows you to tailor contributions to your budget and employee needs. You can also offer higher contribution levels, accelerating retirement savings.
Auto-Enrolment offers a limited investment fund selection. A company scheme provides your staff with a wider range of investment options, allowing them to align their savings with their risk tolerance and retirement goals.
Employer contributions to both Auto-Enrolment and company schemes receive tax relief. However, for some, Auto-Enrolment could mean they are leaving tax advantages behind. Company schemes often unlock additional tax benefits, such as salary sacrifice arrangements, making them even more attractive for employees.
A well-designed company pension scheme is a valuable employee benefit. It demonstrates your commitment to your workforce's long-term well-being, acting as a powerful tool for attracting and retaining top talent.
Offering a competitive pension scheme positions your company favourably in a competitive job market. It portrays you as a forward-thinking employer who invests in its people.
Navigating the world of pensions can be complex. As your Financial Broker, we can help you design a company pension scheme that aligns with your business goals and employee demographics. We'll guide you through the legalities, identify the most suitable provider, and ensure your scheme offers a compelling benefit package for your staff.
Auto-Enrolment is a positive step, but it's a starting point. By establishing a company pension scheme, you can create a more robust and competitive employee benefit program, fostering a loyal and engaged workforce. Let's discuss how we can help you design a scheme that benefits your business and your employees in the long run.
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