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.
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 pension