A good pension scheme should not be looked at as an expense, but as an investment in your business. Rewarding and motivating employees with good pension provision sends a strong signal of commitment to staff, and can aid motivation, recruitment and retention of the best employees.

A pension provided, and contributed to, by an employer regularly tops polls of employees as the most valuable benefit that an employer can offer. This trend is set to continue due to the growing awareness amongst individuals of the need to take responsibility for one's own future retirement needs.

Pensions have attractive tax benefits. For the employee this means that they get the full value of any contributions that you make for them. For example, if you, as an employer, contribute £1000 towards an employee's pension, £1000 will be invested in their plan. If you were to put that sum towards a pay rise, an employee paying the basic rate of income tax would typically only get £690 in their pay packet after National Insurance and income tax deductions (based on 2009/10 tax and NI rates). That's £310 less. For the company, contributions can be offset against corporation tax. This means that a £1,000 contribution towards pensions will cost the company only £790 (for 2009/10 assuming company profits under £300,000).

All companies with 5 or more employees must provide access to a stakeholder pension (unless otherwise exempt). Failure to provide this can result in a fine from the pension regulator of up to £50,000. JM Glendinning Life + Pensions Ltd can help to put this scheme in place.

The government has plans to implement a compulsory national pension savings scheme in 2012. Although full details are still to be finalised, if implemented this will mean that it will be compulsory for employers and employees to contribute to either the governments personal accounts or to their own scheme which meets certain exemption criteria. Employers should start to consider the fixed cost implication if these proposals are implemented and J M Glendinning Life + Pensions Ltd will be happy to work with you to create an appropriate strategy.