Employees earning up to £30,000 a year will be able to take a stakeholder pension and belong to their employers’ final salary occupational pension scheme, the DSS announced last week.
Employers welcomed the move because they can start detailed planning for the introduction of stakeholder pension schemes.
Stakeholder pensions bring benefits such as low administration charges and the facility to draw a quarter of the fund as tax-free cash on retirement.
“Providing there are no hidden complexities which will create administrative difficulties for hard-pressed occupational pension schemes, the DSS and the treasury are to be congratulated on reaching this sensible decision.”
CBI director of HR policy Susan Anderson said, “This is good news. Employers had been concerned that, without concurrency, both occupational schemes and stakeholder schemes would suffer.”
William M Mercer worldwide partner Peter Thompson said, “The industry has worked closely with the Government to find a solution to the concurrency issues which satisfies both sides.”