Employers
are at risk from hefty fines because they are ignorant of their legal
commitments under the new stakeholder regulations, according to research.
More
than 60 per cent of companies do not plan to set up a stakeholder pension scheme
despite the fact that the regulations come into on 1 April according to a study
by law firm Punter Southall & Co.
The
survey, which analysed awareness of stakeholder requirements among 250 of the
largest companies in the UK, also found that many respondents were misinformed
about which employees may be eligible for a stakeholder scheme.
Just
10 per cent of employers said they would be offering a stakeholder scheme to
their contractors and only 23 per cent intended to offer a scheme to their
temporary staff.
But
under the new regulations both sets of employees may be entitled to membership
of a stakeholder pension even though they are excluded from many existing
occupational schemes.
The
Welfare Reform and Pensions Act 1999 requires employers to provide relevant
employees access to stakeholder pensions schemes unless they are exempt.
If
employers who are not exempt do not provide access to the scheme by 8 October,
the Occupational Pensions Regulatory Authority has the power to fine them up to
£50,000.
Steve
Leake, principal at Punter Southall, said, “It is alarming that such a large
proportion of big business players fails to appreciate or chooses to ignore
even the most basic legal commitments imposed on them by the new stakeholder
regulations.
“Stakeholder
is not an issue that can be swept under the carpet. Those companies which have
not yet taken serious concerted action to address the new rules must seek
professional advice immediately.
“If
they let apathy prevail they can expect to see a stern letter and a hefty fine
from Opra in October when the deadline for implementation expires.”
A
new website has been set up by Opra which will show employers if they need to
offer stakeholder pensions to staff.
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They
will be asked to answer “yes” or “no” online to a series of simple questions
and will be able to see if they are exempt from having to offer access to
stakeholder pensions.
See
our at-a-glance guide to stakeholder pensions at www.personneltoday.com/lawguides
