Money Purchase Pension Schemes - Wind Ups       

DC / Defined Contribution / Group Money Purchase Pension Schemes

• Should you continue with a Group Money Purchase scheme now A Day (6th April 2006) has come and gone?

  • And the answer is........

    • almost certainly not!!

• All the reasons to have a Group Money Purchase have gone

  • Group Money Purchase arrangements cost more to run

  • They have much greater legislative liability, including Trustee Liabilities

  • They no longer offer the potential for greater tax free cash or death benefits

  • The Group Money Purchase is dead: it's just that not everyone has noticed yet!

  • GPPs and Stakeholders are their natural successors

  • And, new pensions schemes work well as part of a Flexible Benefits Package

• If you have a Group Money Purchase, now is the time to consider the options

  • Stakeholders are simple, but limited, and tend to be suited to smaller companies

  • GPPs (Group Personal Pensions) offer much wider investment choice

  • Group SIPPs are hugely flexible for Directors and Senior Staff

• So, how much hassle is there in winding up a Group Money Purchase and replacing it with a modern group arrangement?

  • surprisingly little, because we do all the work for you

• And is it costly?

  • No! Quite the opposite. Generally your company will save money by making the changeover!

  • With an online administration system from TEBC your admin costs will be low and totally controlled

• Make the changeover in conjunction with offering Salary Sacrifice and your staff will appreciate the enhanced pension benefit

• Make the changeover and offer a Group SIPP to senior staff and give them 21st Century Pension

• Offer a Flexible Benefits Package and seriously increase staff satisfaction

• But whatever you do, consider making the changeover soon, so you can save money and offer your staff a modern flexible pension

• The next step is to look at what you've got, what would be appropriate and how the changeover might happen

  • to start the process just contact us and we will talk you through it

Money Purchase Wind Up Enquiry

For your information:- Types of  Group Money Purchase Pensions

• CIMPs are Contracted In Money Purchase pensions

  • the group scheme does not contract members out of S2P (State 2nd Pension, which used to be called SERPs)

  • this is the most common type of Group Money Purchase arrangement

• COMPs are Contracted Out Money Purchase pensions

  • staff are automatically contracted out of S2P

  • most schemes used to be set up this way

  • in recent years they have become uncommon because they are often such an administrative nightmare

You almost certainly have a CIMP not a COMP

Whichever type you have,  it is vital to review the scheme and look at changing to a Post A Day arrangement

Summary of some key differences:

CIMP    Group Personal Pension    Group Stakeholder

no            yes                                        yes                                eligible to all?

no            yes                                        yes                                no Trustee responsibilities

no            yes                                        yes                                no Trustee responsibilities for leavers

no            maybe                                  yes                                flexible retirement options

no            maybe                                  yes                                phased retirement

no            maybe                                  yes                                income drawdown

no            some                                    yes                                full range of investment options

no             yes                                        yes                               scheme assets controlled by member

no            yes                                        yes                                scheme assets controlled by member when he leaves

Group Money Purchase Review Enquiry Form

The Employee Benefits Consultants

`

Copyright © 2005 TEBC Ltd
Last modified: 20-May-2007