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Costs of Setting Pension for your Employees

Costs of Setting Up a Workplace Pension for your Employees

Costs of Setting Pension for your Employees

Costs of Setting Up a Workplace Pension for your Employees

The first step to starting up a pension fund for your employees should be learning about the costs of setting up a workplace pension. Nothing ultimately gives you the drive to push forward with something like being sure you can afford it.

However, we understand that costs don’t take a one-size-fits-all approach. Charges and requirements vary from one country to another and from business to business. 

Therefore, this article helps you discover the costs you may incur when setting up a workplace pension to help you know exactly what it will cost you.

Factors Affecting the Costs of Setting Up a Workplace Pension

The amount and time you spend while setting up your workplace pension are determined by the following factors:

Whether you hire consultants

Setting up a workplace pension may seem like a complicated process if you are new to it. Therefore, most businesses prefer to hire advisers and consultants to guide them through the process.

Naturally, if you choose to hire advice and support services, you will incur service-related costs.

However, this should not deter you from taking consultants if you see fit. You ultimately save more time, and labor, and reduce the chances of making errors, and the mental stress of embarking on something new.

How your payroll runs

How you run your payroll ultimately determines whether or not it will cost you extra to set up a workplace pension for your employees. For example, if your payroll is managed by an in-house accountant whose job description does not include remitting pensions, you may need to pay them a higher rate than you currently do.

The Pension Scheme   

Generally, different pension schemes require different contributions. However, there is a minimum set limit for the contributions an employer is supposed to contribute. If your workplace pension scheme requires higher payments, then that only means you might incur higher costs of setting up.

The number of employees

The number of employees doesn’t directly affect the cost of setting up a workplace pension. However, if you hire external consultants, they may charge you per employee. This will essentially mean that if you have many employees working for you, it will cost you more.

Timing

Short time frames might make the cost of setting up your workplace pension to be higher. Therefore, it is important to set favorable timelines to avoid any extra costs that come with a last-minute rush. For example, some consultants may charge you higher fees for booking on short notice.

Your pension software service provider

In the digital era, it is only natural for employers to consider using software to help with pension administration and management. Different service providers offer different price packages. You must undertake ample research to find one that meets all your needs at the best price.

Costs of Setting up a workplace pension for your employees

As earlier pointed out, the cost will vary from business to business and from country to country. Here’s a simple table to help you figure it out:

FactorUnit Cost (per employee)Total Cost
Advice/ Consultation  
Payroll charges (if applicable)  
Pension scheme  
Employee Number  
Time-related costs (if applicable)  
Pension Administration Software  
GRAND TOTAL  

In Summary

You will incur various costs when setting up a workplace pension for your employees. The secret lies in identifying which ones they are, as in the article, and choosing affordable service providers. If you would like to get an affordable pension management software like FundMaster, please contact us and we’ll send you a quote!

The first step to starting up a pension fund for your employees should be learning about the costs of setting up a workplace pension. Nothing ultimately gives you the drive to push forward with something like being sure you can afford it.

However, we understand that costs don’t take a one-size-fits-all approach. Charges and requirements vary from one country to another and from business to business. 

Therefore, this article helps you discover the costs you may incur when setting up a workplace pension to help you know exactly what it will cost you.

Factors Affecting the Costs of Setting Up a Workplace Pension

The amount and time you spend while setting up your workplace pension are determined by the following factors:

Whether you hire consultants

Setting up a workplace pension may seem like a complicated process if you are new to it. Therefore, most businesses prefer to hire advisers and consultants to guide them through the process.

Naturally, if you choose to hire advice and support services, you will incur service-related costs.

However, this should not deter you from taking consultants if you see fit. You ultimately save more time, and labor, and reduce the chances of making errors, and the mental stress of embarking on something new.

How your payroll runs

How you run your payroll ultimately determines whether or not it will cost you extra to set up a workplace pension for your employees. For example, if your payroll is managed by an in-house accountant whose job description does not include remitting pensions, you may need to pay them a higher rate than you currently do.

The Pension Scheme   

Generally, different pension schemes require different contributions. However, there is a minimum set limit for the contributions an employer is supposed to contribute. If your workplace pension scheme requires higher payments, then that only means you might incur higher costs of setting up.

The number of employees

The number of employees doesn’t directly affect the cost of setting up a workplace pension. However, if you hire external consultants, they may charge you per employee. This will essentially mean that if you have many employees working for you, it will cost you more.

Timing

Short time frames might make the cost of setting up your workplace pension to be higher. Therefore, it is important to set favorable timelines to avoid any extra costs that come with a last-minute rush. For example, some consultants may charge you higher fees for booking on short notice.

Your pension software service provider

In the digital era, it is only natural for employers to consider using software to help with pension administration and management. Different service providers offer different price packages. You must undertake ample research to find one that meets all your needs at the best price.

Costs of Setting up a workplace pension for your employees

As earlier pointed out, the cost will vary from business to business and from country to country. Here’s a simple table to help you figure it out:

FactorUnit Cost (per employee)Total Cost
Advice/ Consultation  
Payroll charges (if applicable)  
Pension scheme  
Employee Number  
Time-related costs (if applicable)  
Pension Administration Software  
GRAND TOTAL  

In Summary

You will incur various costs when setting up a workplace pension for your employees. The secret lies in identifying which ones they are, as in the article, and choosing affordable service providers. If you would like to get an affordable pension management software like FundMaster, please contact us and we’ll send you a quote!

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