If you set up new pension schemes for your clients, make sure that they meet certain criteria. You will probably need to register the scheme with us.
You should ensure that schemes meet the needs of employers and their staff.
- Register new schemes with us if necessary.
- Most employers are likely to choose a defined contribution (DC) scheme such as a group personal pension or master trust.
- Schemes used for automatic enrolment must meet certain legal criteria.
- DC schemes must meet certain standards.
It’s a legal requirement for all work-based pension schemes that are registered with HM Revenue and Customs (HMRC) and have more than one member to also register with The Pensions Regulator.
You can register new schemes with us using Exchange.
Types of scheme
There are a number of different types of pension arrangement including defined contribution (DC), defined benefit (DB) and hybrid schemes.
The most likely choice of scheme for many employers will be a DC scheme such as a group personal pension or master trust. As these schemes are usually run by large, specialist pension providers they should cost less and require less input from employers.
We are encouraging employers with fewer than 1,000 workers who will only be paying the minimum legal contribution rate required for automatic enrolment to question any recommendation that they set up a new trust-based pension scheme for their workers. The majority of small or medium sized employers will not benefit from setting up a trust-based scheme as they are generally unable to devote a high level of money and time to running the scheme.
Automatic enrolment criteria
You must ensure that schemes you set up for automatic enrolment meet certain legal criteria.
You also need to ensure that default arrangements in DC schemes which are being used to comply with automatic enrolment duties meet the required charge controls. For more information, see our guidance for trustees on the DC charge controls.