Employee Benefit Pension and Defined Contribution

Employee Benefit Pension and Defined Contribution

We can advise companies on what type of pension to offer to employees. In the current market, there are two main pension schemes, known as Defined Benefit Pension and Defined Contribution Pension.

A Defined Benefit Pension, also known as Final Salary Pension, is a pension plan in which the monthly payment on retirement is the basis of the ‘defined’ formula used to calculate the employee’s pension contributions.

A Defined Contribution Pension is a pension plan where employee’s individual contributions are invested in, for example, the stock market or pension investment funds, and the returns on investments are then put into the individual’s pension pot. Contributions in this pension plan are defined, however the outcome will only be known once the employee is looking to retire.

The two main areas of pension scheme advice we can offer through HEB are listed below; clicking on the links will bring you to more detailed pages. Each area includes a wide-ranging variety of aspects; therefore all of our client solutions are bespoke and are established to ensure the individual requirements of every client are met.

Defined Contribution Pension Consulting

Henderson Employee Benefits specialise in the communication of benefits to employees on behalf of the employer, thus ensuring value to the employer for the non-monetary benefits of an employee remuneration package.

Our team of advisers specialise in both the setting up of new pension schemes, but also being appointed to assist employers in communicating the benefits of existing pension schemes and ensuring compliance with current legislation.

Our range of services include advice on design, provider choice, employee communications and all administration interactions between providers and employees working for companies who choose to offer Defined Contribution Pensions.

A Defined Contribution Pension is a pension plan where employee’s individual contributions are invested in, for example, the stock market or pension investment funds, and the returns on investments are then put into the individual’s pension pot. Contributions in this pension plan are defined, however the outcome will only be known once the employee is looking to retire.

The Defined Contribution Pension consultancy service is not purely aimed at providing advice and recommendations for a provider, but about providing an integrated, ongoing service.

It is important for employees to understand their employee benefits and what choices they have. This could be in the form of group personal pension, group stakeholder pension or group occupational pension schemes. The message and the focus to help engage the employees is the same.

Pension investment is often an area for which most employees don’t understand. This is often due to what appears to be over-complicated and technical material, and a lack of good communication from company advisers. Our experiences show that this should not, and does not need to be the case.

All employers will be forced to think long and hard in the next few years with the government’s launch of NEST pensions (National Employment Savings Trust), which will have an impact on all employers and most employees. We can assist in ensuring that both employers and employees take full advantage of these legislative changes.

Defined Benefit Pension Consulting

Henderson Employee Benefits (HEB) provides advice to employers and / or trustees in managing the risk of what is normally now, the employers ‘legacy’ scheme.

A defined benefit (DB) pension, also known as Final Salary Pension, is a pension scheme which the pension on retirement is on the basis of a defined formula such that the employee has a certain known level of pension, based on service and earnings. The employer though has a potentially open needed pension liability.

HEB can provide advice to employers and trustees on all key issues such as;

  • Pension accrual cessation
  • Deficit recovery plans
  • Compliance with The Regulator Codes of Practice via secretarial support for Trustees
  • Pension Scheme wind up
  • Enhanced transfer value exercises

We also have experience of providing a full range of consultancy advice to schemes entering the PPF (pension protection fund), which is a statutory fund founded to ensure continuity in pensions when employers become insolvent.