MIB Group is to introduce a new stakeholder pension scheme along with independent financial advice for all 87 employees.
The new scheme will replace the construction company’s existing stakeholder pension, which had not been taken up by any staff.
The company decided a plan with a fixed-fee arrangement would be in the best interest of staff. Although those taking up the plan will incur an annual management charge of 0.81%, a set-up charge and fixed monthly charges of £4 to cover the cost of advice, they would have incurred higher costs if MIB had chosen a commission-based arrangement.
Janet Mckenzie, head of HR at Cardiff-based MIB, said: “We did some modelling on the differences between the two, and for our profile of employees it would work out more costly to take the commission route. We wanted something that was in the interest of the majority.”
Independent financial advice, provided by Financial Planning Bureau, will be provided to all employees who join the pension, due to be introduced this month, and any new starters with the business. A salary sacrifice set-up for contributions will be the default arrangement for all employees joining the pension.
“The benefit to [staff] is they will get IFA advice,” said Mckenzie. “They will get a one-to-one session with a professional, advising them on their risk profile and talking them through questions about when they want to retire and the sort of investments they want.”
As a small, newly established business, MIB Group is not yet in a financial position to make employer-funded contributions.
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