The latest in a series of articles that give the basics on key areas of
employment legislation. This issue we look at stakeholder pensions
The hard facts
From 8 October 2001, most employers have to offer their employees access
to either an occupational pension scheme or a stakeholder pension scheme. This
is the Welfare Reform and Pensions Act 1999 (the "Act")
www.legislation.hmso.gov.uk/acts/acts1999/19990030.htm
– Section 3 of the Act sets out various requirements that an employer must
comply with.
These include the requirement that an employer must:
– Offer relevant employees access to a registered stakeholder pension
scheme, having consulted with relevant employees
– Supply basic information about the designated scheme to relevant employees
and allow representatives of the scheme reasonable access to the relevant
employees in order to supply them with information about the scheme, and
– Deduct the employee’s contribution to the scheme from his remuneration,
where requested to do so by a relevant employee.
The Stakeholder Pension Schemes Regulations 2000 (the
"Regulations")
http://www.legislation.hmso.gov.uk/si/si2000/20001403.htm
The Regulations set out exemptions (section 22) from the requirements of the
Act where an employer:
– Has fewer than five staff, and
– Offers certain personal pension schemes.
The Regulations also provide (section 23) that certain staff are not
considered to be "relevant" staff and therefore employers need not
provide access to a stakeholder pension where an employee:
– Can join an existing occupational pension scheme within 12 months of
starting work with an employer
– Cannot join their employer’s occupational pension scheme because they are
under the age of 18 or are within five years of the normal pensionable age for
the scheme
– Has not been continuously employed for three or more months
– Earns less than the National Insurance Lower Earnings Limit for one or
more weeks within the past three months, and/or
– Is ineligible to make contributions due to a restriction imposed by the
Inland Revenue.
Reading around the subject
General Information: An introduction to Stakeholder Pensions. An
extremely useful general guide to the stakeholder pension, including a
definition of the stakeholder pension, a brief summary of who should have one,
as well as details of the regulation of stakeholder pensions and tax and
national insurance:
http://stakeholder.opra.gov.uk/general/index.shtml
– Employers and Stakeholder Pensions. Another excellent summary detailing
the employer’s duties to its employees to provide access to stakeholder
pensions. It covers instances where employers are exempt from the requirement
to provide access to a stakeholder pension scheme and those employees who are
not covered by the duty. It also offers guidance to employers on selecting a
stakeholder pension scheme which the employees are invited to join:
http://stakeholder.opra.gov.uk/employers/index.shtml
– Frequently Asked Questions. This contains a particularly good section for
employers on what stakeholder pensions are, the employer’s duties towards their
employees, designating a scheme, consulting the employees and the everyday
running of the scheme:
http://stakeholder.opra.gov.uk/faqs/index.shtml
– Employer’s Decision Tree. This online decision tree will help an employer
decide whether to offer a stakeholder pension to its staff:
http://stakeholder.opra.gov.uk/decisiontree/index.asp
– Stakeholder pensions – a guide for employers. A DSS publication covering
the employer’s duties, choosing a pension scheme, providing employees with
information about the scheme and time limits for designating a scheme:
http://www.dss.gov.uk/publications/dss/2000/stakeholder_emp/index.htm
Other sources
www.opra.gov.uk
www.inlandrevenue.gov.uk/stakepension
www.dss.gov.uk
www.legislation.hmso.gov.uk
www.ft.com
www.fsa.gov.uk
www.stakeholderhelpline.org.uk
www.pensionguide.gov.uk
Useful contacts
Occupational Pensions Regulation Authority
Details of the office and e-mail address and telephone numbers for OPRA:
http://stakeholder.opra.gov.uk/contact.shtml
The Inland Revenue Employer’s Helpline
Helpline answering enquiries regarding stakeholder pensions
08457 143 143
By Catherine Taylor, Rebecca Ford and Robert Hughes at Olswang, www.olswang.com
