For some reason this does not sit right with me but I do not know why - hopefully just the amount of admin.
A limited company wants to start paying in to the pensions of its 5 employees it will match the employees contributions up to 5%. It does not wish to set up a company pension sheme but pay in to each employees current personal pension scheme. Is it OK for them to do so?
Replies (6)
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I hope so....
because this is what my employer does for me and the scheme was set up as a personal pension plan by the IFA I use. Incidentally I understand that my pension provider (Scottish Widows) has a minimum employer contribution of £50 per month.
more hassle
This route is more hassle for the employer as they have to make a separate payment to each employee's scheme, rather than one payment if it was a company scheme, but I don't think there is anything wrong with it.
No problems ...
I've been doing it for years. The only important thing is that the pension provider knows that it is a gross payment from an employer.
Agree
Just to back up Steve's point, the company has to make contact directly with the pesion providers and arrange direct debits, this ensures they are treated as gross contributions. If this is not done and payments arrive at the scheme and treated as member's contributions they will be a benefits in kind with nasty NI ramifications.
I was told during a previous PAYE compliance visit
that the contract must be between the Employer and the Provider otherwise there are NIC consequences. They quoted NIM 02060. I have asked 2 IFA about this and they seems to think there is no NIC issues. I'm very confused.
AIMCOM
You are right (see my posting) the contract is between the employer & the provider, but the scheme can be the employee's.