Setting Up Occupational Schemes

An occupational scheme is a pension scheme set up by an employer for their employees. For help in setting up a scheme, consult with Endeavour Financial Planning today.

Retirement in The Wirral

The Wirral is a great place to live. For people enjoying an active retirement there are plenty of places to visit and things to do in the Wirral area. To enjoy a full and active retirement requires a decent pension income. Wirral businesses can help by setting up generous occupational schemes.

All businesses in the Wirral area will need to have an occupational scheme for their employees. Some smaller firms will have a deadline in the near future when they must launch their scheme.

What does a scheme provide?

An occupational scheme can provide a lump sum and a pension income at retirement. It can also provide benefits for dependants if members of the scheme die before or after their retirement. A scheme can be based on the employee’s final salary when they retire or the pension savings can be dependent on the investment success of the fund.

A business can set up its own trust based occupation scheme, or have a contract with a pension provider to administer one.

An occupational scheme has tax benefits. Tax relief is applied to contributions, but it needs to be registered by the Pension Schemes Office division of the Inland Revue who will approve the tax benefits.

What about contributions?

Contributions are usually shared between the employer and the employee, but an employer can choose to make all the contributions. The employer’s are “benefits in kind”, meaning that they are not subject to income tax and national insurance. The employer’s contributions are treated like other business expenses for accounting purposes.

The employee’s contributions are subject to tax relief. There is no income tax or corporation tax applied to the funds that the scheme accumulates.

A scheme that is set up as a trust must separate the scheme funds from employer assets in order to protect the employer’s contributions if the business ceases trading.

Is auto enrolment compulsory?

After an occupational scheme has been set up, all employees who earn over £10,000 and are at least 22 years old but not over the state pension age, must be auto enrolled in the scheme. Although enrolment is compulsory, employees can opt out of the scheme.

If you want to set up an occupational scheme or need advice about retirement planning, then talk to the financial experts at Endeavour Financial Planning today.

Estate and Tax Planning advice are not regulated by the Financial Conduct Authority.

Risk Warning

Auto-enrolment advice is not regulated by the Financial Conduct Authority.

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