Occupational Scheme Set-up

An occupational scheme can be set up by companies, partnerships or sole traders to provide income or a lump sum when an employee retire, and financial help for dependants if the employee dies either before or after retirement. For expert advice on planning your retirement finances, talk to Endeavour Financial Planning.

Helping hands on the Wirral

The Wirral Business Association and the Wirral Chamber of Commerce promote business success on the peninsula. One key to a prosperous Wirral business is to employ talented staff. A good occupational scheme can help attract and retain gifted employees.

Who can set up an occupational scheme?

It takes expert knowledge to set up an occupational scheme. Schemes can be set up as a trusts run by trustees, or a life insurance company can set up and run a scheme. For companies looking at setting up a scheme, there are many factors to consider.

An occupational pension scheme can be noncontributory (where a company pays all the pension contributions) or contributory (where contributions are shared between the employer and the employee).

What types of occupational schemes are there?

There are three basic types of schemes: money purchase, defined benefits and final salary. A money purchase scheme is one where the employee has a pension pot, the value of which is dependent on the total amount contributed and how well the fund has grown through its investments.

A final salary scheme links the pension income to the final salary of the employer. It is rare for a final salary scheme to be offered for new members as it is financially costly to fund the full final salary. The actual amount paid can be affected by the number of years an employee has been a member of the scheme.

Defined benefit schemes provide a fixed sum or income on retirement.

Additionally, hybrid schemes can be set up that combine elements of the aforementioned three.

How do occupational schemes work?

Occupational schemes are heavily regulated, and need to be approved and regulated by the Financial Conduct Authority. Contributions are tax fee and the scheme needs the approval of the tax authorities.

Once an occupational scheme has been set up, all employees who earn over £10,000 and
who are over the age of 22 must be auto-enrolled into it.

If you are a member of an occupational pension scheme, talk to Endeavour Financial Planning. We can advise you on the best way to grow your pension savings and plan for a financially comfortable retirement.

A pension is a long term investment. The fund value may fluctuate and can go down. Your eventual income may depend upon the size of the fund at retirement, future interests rates and tax legislation.

Auto Enrolment and Trusts advice are not regulated by the Financial Conduct Authority.

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