Yes – kind of. One of the key reasons why this pension plan is better than most other pension plans is that the pension assets of different individuals are NOT combined into one shared pension scheme – each individual’s pension plan assets are fully segregated, in the name of the individual, so there’s no risk of losing out due to somebody else’s decisions or mismanagement. There are MANY examples of failed company pension schemes, where everyone’s pension is combined into one group, and quite a lot of examples where the company pension scheme deficit is greater than the value of the company (i.e. the pension scheme doesn’t have enough money in it to meet its obligations to the individuals = individuals will lose out, sometimes disastrously).
However, we can set up something which functions like a group scheme from a company perspective – yet each individual will still be protected, because their pension will be 100% in their name. In practise, this means setting up individual pension plans for each employee, but the company can make the payments into them in basically the same way as it would if it was paying into one group scheme – it will show up in exactly the same way on the company accounts, and is actually less complicated to manage, because the company doesn’t have to do anything other than set it up and then pay into it. It also makes it much more easy if people leave – you won’t have to run complex actuarial calculations to figure out who is owed what in future based on each person’s salary or length of service, because everything is already segregated on a person-by-person basis.
It also means that you can easily and efficiently pay different staff different amounts if you want to – perhaps you have senior staff on higher salaries who warrant a higher pension contribution, and more junior or newer staff who would be on a lower salary and benefits package. The only thing you need to do is select the amount and duration, the rest is super easy and runs itself once it’s set up. We strongly recommend discussing the options with each staff member – it’s their pension remember – and they may have circumstances or requests which you wouldn’t otherwise know about, particularly when it comes to choosing a duration, which can impact their retirement age and other future circumstances. And, of course, everyone likes to be consulted about things which affect them – so take the opportunity to have happier staff and be an awesome employer!
Another reason that it’s good for each employee is that they can then take their pension with them if they change employers – you can simply stop paying into their pension, with absolutely no drama, and they can have the new employer pay into their pension, or continue paying in themselves (or they could stop paying in to it, but that definitely wouldn’t be intelligent financial planning). That’s much better (and easier) than having a different pension plan with every employer you’ve ever worked for, which is pointlessly complicated and yet oh-so-common in many countries around the world.
So if you’ve got great staff that you want to keep for the long term, particularly if they’re digital nomads that do (or might) move countries frequently and are therefore not eligible for single-jurisdiction pension plans, have a long hard think about offering them this multi-jurisdictional personal pension plan as part of their package – in many countries employers have a legal requirement to provide a pension plan for their employees, and currently too many digital nomads are missing out because those laws don’t apply to them anymore. Help us fix that problem! PensionsForNomads is the solution :-)
If you would like to know more about your options for providing pension plans to a group of employees, just contact us and ask the question, and one of our pension specialists will help you and explain all the things you need to consider and decide before setting it up – and when you’re ready to set it up, we’ll do it manually (not via the online application process on our website please) because the process is a little bit different.
And if you’re a digital nomad who doesn’t currently have a pension plan provided by your employer, tell them about PensionsForNomads and ask them to set it up for you! It’s always worth asking, and even if they say no you can always start you pension plan yourself :-)