Which type of Scheme is best for your organisation
Choosing a pension scheme can be complex. Here are some points you should consider:
- How important your pension scheme is to you in attracting and retaining staff.
- Whether your employees are with you for a long time, or if you have a relatively high turnover of staff.
- What percentage of payroll you can afford to commit, and whether your organisation can cope with increases in costs.
- Whether your organisation has sufficient assets to be able to back up the pension promises that are made in a defined benefit scheme.
Additionally, there are specific circumstances that might suggest one option is better than another. For example:
- If your priority as an employer is providing security, coupled with a defined level of benefits, then either a Final Salary Scheme or CARE Scheme is for you.
- If cost control is paramount the defined contribution approach may be the best way forward.
- If you are an umbrella organisation, such as a trade body or guild, you might wish to establish a Multi-Employer Scheme that all your members can offer their employees.
- If you are trying to attract staff from the public sector, you may find it useful to consider a comparable Final Salary scheme.