As an employer, the world of pensions often appears confusing and complex as well as being a minefield of information.

But by providing a pension scheme an employer has one of the most important ways to motivate and

retain staff.

What is a Group Personal Pension Scheme?

A group personal pension (GPP) plan is a registered pension scheme. It is a collection of individual personal plans grouped together by the pension provider. Personal pensions offer a wide choice of funds in which to invest. The two options are:

With-profit – contributions are invested in equities and gilt-edged securities. The value of the fund grows as bonuses are added.

Bonuses reflect stock market performance and other factors, such as administration charges. The provider smoothes returns so that some gain in a good year is held back to boost performance in a bad year.

Unit-linked – Contributions buy units in the chosen funds, which then increase or decrease according to the performance of their investments. The value of these investments reflect market performance.

If you offer all your employees access to a GPP, you will be exempt from the requirement to designate a stakeholder pension scheme, providing that:

You contribute an amount equal to at least 3% of your employees’ earnings

You deduct employees’ contributions from their pay & give them access to the pensions provider if requested

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