These are the risks you face if you are not on top of your occupational pension management

Occupational pension administration may seem straightforward. Unfortunately, the reality is different. Managing occupational pensions requires, among other things, a well-considered and documented pension policy, detailed procedures and in-depth expertise in a highly complex field. By understanding the risks and how to get help to reduce them, you can feel confident in your occupational pension management.

As an employer, you have extensive responsibilities to ensure that your employees receive the correct occupational pension when they retire. Because managing occupational pensions is complex in many different ways, there is unfortunately an inherent risk of errors. And unlike, for example, an incorrect salary payment, these errors often take time to come to light. This, in turn, can mean costly and time-consuming corrections for you as an employer.

Pension costs are one of the largest expenses in most companies, making it essential to stay fully on top of the company’s occupational pension management.

The first step towards reducing risks and taking action is to be aware of the risks you face.

These are the common risks you may face

The biggest risks you and your organisation need to manage are financial risks, risks relating to tax and tax deductibility, and brand risks.

Financial risks

The most obvious risk is, of course, that you have paid too little in occupational pension premiums for your employees and therefore need to make retrospective contributions, plus compensate for the investment growth the employee has missed out on. This can amount to substantial sums, as incorrect payments may have continued for a long time before being discovered.

You may also have paid too much in occupational pension premiums, which cannot always be reclaimed from the insurance company – if the error is even discovered.

Tax and accounting risks

Occupational pensions are subject to specific tax rules, particularly regarding tax deductibility. The rules on deductions apply to all employers, regardless of whether a collective agreement is in place. They apply per employee (not to the company as a whole), and there are several different types of pension contributions and provisions, which are also taxed differently. Mistakes here can lead to unnecessary costs for you as an employer, both in terms of actual expenses and inefficiency.

Brand risks

If your employees discover that their future pensions have been managed incorrectly, there is a risk of dissatisfaction and loss of trust among employees. There are also cases where incorrect occupational pension management has generated wider negative publicity for the company.

The pension policy and benefits package are becoming increasingly important in making you an attractive employer, helping you both retain and attract skilled employees. It can be a costly lesson if, as an employer, you fail to meet your employees’ expectations or are not fully aware of your responsibilities.

Our top tips for addressing the risks

By being aware of your risks, you can take action to address them. In our view, this involves four elements: in-house expertise, external expertise, a digital support system and ongoing quality assurance checks.

In-house expertise

The first step is to ensure you have in-house expertise. With this expertise in place, you understand the importance of a clear and comprehensive pension policy, internal procedures and making informed, sound decisions in this area. If you are unsure whether you have the in-house expertise you need, we can help you develop your employees’ skills and increase your knowledge of occupational pensions.

External expertise

Today, there are several external providers you can engage to ensure your occupational pensions are managed correctly.

By bringing in an external partner who specialises in this area, you can be confident that your pensions are managed correctly. Your external expert should also be able to guide you through any questions or concerns that arise, both to complement your own expertise and to ensure correct management.

Read more about what to consider when choosing an external partner.

Digital solutions and support systems

Digital solutions can ensure the quality of processes while making work more efficient. With digital solutions, you can reduce the risk of manual errors and ensure that discrepancies are flagged at an early stage.

By choosing a digital solution designed around the complexity of occupational pensions, and developed with the future in mind, you can be confident that your employees’ occupational pensions are managed correctly.

Regular checks

Regular checks and analyses allow you to detect discrepancies at an early stage. While ensuring the quality of your processes, you can also ensure that occupational pensions are managed correctly in the best interests of both the employer and the employee.

Tailored pension and insurance administration to meet your needs

At FörsäkringsGirot, we have been ensuring that employees receive the correct pension for over 30 years. Today, we help over 320 000 employees across 220 different companies. Our ambition is for occupational pensions to be just as accurate as salaries, every month and every year.

Major work is currently underway on an updated technical solution, so you can be confident that your employees’ occupational pensions are managed correctly and with as much automation as possible, both today and in the future.

Learn more about what we at FörsäkringsGirot can do for you.

From our experience, we know that occupational pension and insurance administration can vary greatly between employers, as can their support needs. If you need help or support with any of the following, we could be the right partner for you:

Payroll:  ensure pensionable pay, accurate calculations, correct reporting, the right person insured, a reliable monthly process, etc.

HR:  ensure benefits, deliver on the employee promise, save resources, etc.

Finance:  cost control, payroll tax, tax deductibility, invoice processing, accurate bookkeeping, etc.

Get in touch and we’ll explain how we can help you simplify and streamline your administration, saving time and providing the correct benefits for your employees.

Take control of your pension costs

A missed or incorrect salary payment is often noticed immediately. Unfortunately, the same is not true of pension contributions. Even though they represent the employee’s future pay. As an employer, you have a far-reaching responsibility to get this right. So it is an important issue to keep track of.

Learn more about how you can take control of your pension costs.