4.9 Group Personal Pensions
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Although such arrangements are offered by many providers the name
is something of a misnomer.
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A personal pension is by definition a personal arrangement, and
group personal pensions are merely a collection of such arrangements
arranged largely for administrative convenience, where the employer
contributes to the arrangements through a single provider. Ownership
and control of the arrangement remain in the hands of the member.
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The main features of group personal pensions are:-
- Contributions will be dealt with centrally. The employer will
collect any employee contributions and remit them together with
employer contributions (if any) to the pension provider. Contributions
may be fixed or earnings related.
- The fact that the provider is operating a number of plans through
the employer, and the administrative savings made by the centralised
collection of contributions, may make it possible for more attractive
terms to be offered than would apply if the same individuals effected
plans independently. Some degree of investment restriction may be
imposed; for example, under the scheme only the with profits or
managed fund may be available.
- Death benefits may be provided under the scheme, or separately
under an employer sponsored death in service scheme, and a level
of benefit, free of medical evidence, may be available
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