For many employees, traditional pension schemes may no longer be an appropriate or efficient way of saving for their future. While there is no ‘one size fits all’ solution, there are alternatives available.
Deloitte can help you understand the alternatives, their profile, and how other companies are reacting to the reward challenge, and assist with a strategy for dealing with the current and future pensions’ environment.
We can help companies consider whether their current pension scheme arrangements remain fit for purpose, and if change is needed, what key elements need to be incorporated in the new design.
Any company pension scheme should look to optimise the balance between:
- The needs of the employees
Have the characteristics and needs of employees changed since the introduction of the pension scheme? For example, employees may now be more mobile between jobs and may place less value on long term savings.
- Corporate objectives
Every company will have a number of objectives in relation to the cost and risk profile of their pension arrangements; these will also need to align with broader corporate strategies.
- Regulatory environment
Recent changes to taxation and legislation of UK pensions may mean that current pension arrangements are no longer suitable. For example, new tax rules may mean that current pension arrangements are not an efficient form of remuneration and changes may be required to meet auto-enrolment regulations.
- We have considerable experience of advising and implementing benefit strategies for an extensive range of companies.
- From our experience of advising other companies, we have developed a range of tools and methodologies to assist with analysing and explaining each of the key options.
- We have strong relationships with all key pensions organisations, for example the Department for Work and Pensions, the NEST Corporation and the Pensions Regulator.
The choices available to you range from the simple offer of cash alternatives to more involved solutions.
These options can include:
- Group Retirement Pension Plans;
- Portable International Pension Plans;
- Wealth Accumulation Plans;
- Cash; and
- Other Trust arrangements
The right pension alternative for your companies will depend on alignment with several key factors, including:
- The preference for long term or short term planning.
- Whether the organisation is a large employer, small employer or partnership.
- Whether immediate or deferred benefits are to be provided to employees.
- The requirements for compulsory deferral or performance based rewards.
- The international mobility profile of the organisation.