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• Introduction
• Steps to arranging a Stakeholder Pension
scheme
Stakeholder pensions go on sale today.
Alistair Darling, Social Security Secretary, said: "Stakeholder
pension go live today. We want employees who can save to do
so. Stakeholder pensions provide another option to occupational
and personal pensions.
"It is in everyone's interest to encourage people to save for
their retirement. Providing access to a stakeholder pension
scheme is a simple process and will encourage staff to consider
their pension options."
Offering access to a stakeholder pension
involves two easy steps:
All firms with five employees or more must provide their relevant
employees with access to a stakeholder pension by October 2001
unless they are exempt.
1. Pick a scheme after consulting your relevant employees
on what scheme they would like. It is up to you how you do this.
A list of all registered schemes is held by Opra (Occupational
Pensions Regulatory Authority) - ring 01273 627600 or look at
website www.stakeholder.opra.gov.uk.
2. Once you have settled on a scheme, it is up to your
staff to decide for themselves whether or not they want to join.
All you have to do is tell them which scheme you have designated
and provide the scheme provider's contact details and offer
payroll deduction of contributions. The chosen pension scheme
will help you do this.
Employers do not have to run or contribute money to a pension
scheme. They will not be held liable for the performance of
a stakeholder pension.
The DSS has produced a comprehensive, easy to read guide on
stakeholder pensions for employers. If you want a copy of the
guide ring 0845 7 646 646. For clarification on the content
of the guide you can ring the Inland Revenues Employers' Helpline
on 0845 7 143 143.
The Government is introducing the Pension Credit from 2003 that
will reward pensioners who have saved for their retirement.
People who have income from a second pension or savings and
who qualify for the credit will be rewarded with a cash top
up.
Notes
1. A relevant employee is someone who is not already eligible
to join an occupational scheme, who has been with the company
for more than three months and who earns more than the National
Insurance lower earning limit (£72 per week from 6 April
2001).
2. Firms are exempt from offering stakeholder pensions if they
have fewer than five employees, they make a 3% contribution
into a personal pension for their staff with no exit charges
or if they offer an occupational pension to all their staff
within one year of joining.
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