Final Salary schemes - saving money

With employee benefit consultants charging the earth for what is often a poor service it is important to take stock of both costs and service.

Cost

We believe we can save the company pension considerable costs by "bundling up" the pension scheme. Using a third party administrator effectively adds an extra tier of costs that we feel can be avoided.

By using our services we will place you with the most appropriate life company, which will replace the role of the third party consultant and due to the fact that they hope to manage some of the funds then they will subsidise the cost of administration.

The result is that you should save up to 80% of your current costs.

We are happy to offer a no win no fee service to establish if such savings are open to you.

Service

Service is an issue that has two aspects to it:

1. The service the Trustees get.
2. The service the members and ex members get.

The service the Trustees get is easy to assess, as this is something you deal with on a regular basis. However, the service that current members and ex members get is much harder to quantify and is best indicated by the take up of the scheme and the extra contributions that are paid into the AVC scheme.

The service the members get reflects on the company and poor service undermines the purpose of offering a company pension scheme.

By offering a pension scheme you want to help ensure that your employees are well catered for in retirement. Consequently you pay enormous costs both in funding and support to provide such schemes. Yet, if you do not provide the support then you run the risk of "ruining the ship for a ha'peth of tar"

Retirement planning and ongoing advice

For many years employers have looked after their employees with very generous pension schemes and then when they come to retire there is noone to give them very basic help about the pension scheme benefits. Most employees want to know whether they are better to take the maximum cash or maximum pension at retirement or they want to know whether there are any alternatives to taking the annuity in the prescribed format.

There are several problems for Trustees:

1. Advice - only FSA authorised individuals can give advice.
2. Cost - employing an authorised IFA can be very expensive.
3. Integrity - ensuring that the IFA has the employees' best interests at heart.

Due to these difficulties employers and Trustees have tended to dodge the issue and do nothing. This means that employees with little understanding of what the implications are either make decisions themselves or they get financial advice elsewhere. This could lead to a conflict of interest as it may be in the financial advisers' interest to recommend that the maximum tax-free cash be taken as that gives more money to invest.

However, with the current markets the way they are it is often in the employee's interest to maximize the pension.

Existing employees and those coming to retirement need quality independent financial advice. The best advisers work on a fee basis, which ensures that the adviser is looking after the employee's interests. This can be very expensive for an individual but is very cheap for a company to provide as regulatory work required for the IFA is much less if the company is appointing them.

One very cost effective solution is to book an IFA to do one day sessions for retiring or existing members. Working on the basis of 20 minutes per employee we can see up to 20 people in a day giving very basic advice on what their options are and generally point them in the right direction.

With easy to complete feedback forms the Trustees can monitor the competence and honesty of the IFA.

The number of one day sessions booked will depend upon the number of employees coming to retirement and enthusiasm with which the sessions are viewed.

Cameron Financial Services pride ourselves on the honesty and quality of our counselling.

The Inland Revenue will allow a payment of up to £150 per employee per annum for financial advice without it counting as a benefit in kind providing it is a service that is offered to all employees.

By offering an in house service you will find employees get enormous benefit from what is a very small investment.

The fact that you offer retirement counselling will be very popular with employees and can be promoted widely giving you the kudos of being a caring employer at a cost less than that of a part time administrator.

This service can be expanded out to all staff so that if they have a pension query they can book into one of the seminars and have a session to answer any queries that they have.