How to choose the right pension scheme for your business

What types of pensions are available?

There are two common types of pension scheme:

Defined contribution pension schemes

This is the most common type of pension scheme and works by taking a contribution from you and your employee and invests it.

The level of risk your employees take with their pension fund is their own choice, unless there is a scheme manager in place for the pension.

Defined contribution pension schemes are usually accepted for auto enrolment.

Defined benefit pension schemes

This pension scheme is built up using contributions from you and your employee. The amount they receive at retirement is based on how long they have worked for you and how much they earn when they retire (final salary pension) or an average of what they earned during their career (career average pension).

These schemes are unlikely to accept any new employees for auto enrolment.

Which pension do you need?

If you already have a workplace pension

Check to see if your provider will accept any new employees onto the scheme and whether they are set up for auto enrolment.

If you have an existing defined contribution pension scheme: you will need to automatically enrol your eligible employees before your staging date.

If you have an existing defined benefit pension scheme: which still accepts new employees, you have the option of deferring your staging date until October 2017.
If your existing pension does not accept new employee's contributions: you will need to find a new pension scheme for anyone who does not currently pay into your existing one.

If you need a new workplace pension

Here are some of the pension schemes which accept auto enrolment requests:

Visit the Pensions Quality Mark website for more information on these pension schemes or speak to an independent financial advisor to discuss your options.

Top four questions to ask a pension provider

Need help choosing the right workplace pension?

An independent financial advisor can advise you on your options for a workplace pension, find one in your area by completing our auto enrolment advice service form.

Auto enrolment advice service form

What is next?

Once you have assessed your workforce and decided which scheme you want for your workplace pension it is time to set up the pension ready for your staging date.

Here is where you can find out how to set up your workplace pension.