Understand workplace pensions

Automatic enrolment has made workplace pension saving routine, but that does not necessarily mean employees understand what is being provided.

Employees may focus on the amount deducted from monthly pay without appreciating that their employer is also contributing or that tax relief may increase the amount reaching their pension fund.

For somebody who remains in a workplace pension for many years, employer contributions can represent a significant part of their overall remuneration.

Employers are not expected to provide personal financial advice, but they can make sure employees have access to clear information about the workplace scheme.

Employees should know where to find information about their pension provider, how much they and their employer are contributing and where they can view the value of their pension fund.

It can also be useful to remind employees to review their pension arrangements periodically, particularly after pay rises or significant changes in personal circumstances.

Employers should continue to monitor their automatic enrolment responsibilities. Employees who initially opt out may need to be re-enrolled at the appropriate time, and contribution levels should be correctly reflected through payroll.

For employers, workplace pensions are more than a compliance exercise. A good pension scheme can form part of the overall reward package and may help with recruitment and retention.

The earlier pension saving begins, the longer investments have the opportunity to grow. Helping employees understand the value of the contributions being made on their behalf can consequently increase appreciation of a benefit the business is already funding.