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06 April 2001

Countdown to stakeholder pensions begins for employers.

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

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.


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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last modified: 16-Jan-2001