Group Personal Pension Scheme
Group Personal Pensions (GPPs) are a type of defined contribution pension which some employers offer to their workers. As with other types of defined-contribution scheme, members/employees in a GPP build up a personal fund, which they then convert into an income at retirement.
In a group personal pension, the scheme is run by any of the registered pension providers. The employer chooses the pension scheme provider, usually with the help of an Independent Financial Adviser. Each personal pension within the group is an individual contract between the employee and the pension provider.
The provider claims tax relief at the basic rate on employee’s contributions and adds it to their fund. If an employee is a higher or additional-rate taxpayer, they will need to claim the additional rebate through their own tax return.
For each employee who is a member of the group scheme, their pension fund will grow with a combination of on-going contributions, tax relief and investment performance. Contributions may be made by either or both the employee and employer.
Any contributions made by the employer makes will be an allowable business expense.
If an employee changes jobs, their group personal pension is usually automatically converted into a personal pension and they can continue paying into it independently.
Group Personal Pensions (GPPs) are a type of defined contribution pension which some employers offer to their workers. As with other types of defined-contribution scheme, members/employees in a GPP build up a personal fund, which they then convert into an income at retirement.
In a group personal pension, the scheme is run by any of the registered pension providers. The employer chooses the pension scheme provider, usually with the help of an Independent Financial Adviser. Each personal pension within the group is an individual contract between the employee and the pension provider.
The provider claims tax relief at the basic rate on employee’s contributions and adds it to their fund. If an employee is a higher or additional-rate taxpayer, they will need to claim the additional rebate through their own tax return.
For each employee who is a member of the group scheme, their pension fund will grow with a combination of on-going contributions, tax relief and investment performance. Contributions may be made by either or both the employee and employer.
Any contributions made by the employer makes will be an allowable business expense.
If an employee changes jobs, their group personal pension is usually automatically converted into a personal pension and they can continue paying into it independently.