Stakeholder Pensions Update: October 2001
The new rules put the onus on most employers with five or more employees to give staff a pension scheme. For the firm to fall into this category, there must be at least one member of staff on less that £3,484 per annum. 

Exemption from the rules is given if you employ four or less people. You will also be exempt if all your staff are on less than £3,484 per annum, and have been so for at least three years in a row. The options available are as follows: 

Stakeholder pension (available from April 2001)

An alternative qualifying scheme. For example: Group Personal Pensions. These require a minimum contribution from the employer of at least 3% per annum. 

If a company fails to comply with the new law by next October, they could face heavy fines. 

If your firm already has an approved Occupational Pension Scheme up and running and is open to all employees, then you are exempt. However, if this is not the case, then a Stakeholder Scheme must be arranged. The exceptions to this are as follows

New employees 

Employees under the age of 18 

Employees within 5 years of retirement 

Firms are exempt if they have a Group Personal Pension Plan in place and: 

It is open to all employees over the age of 18; 

The employer contractually pays a minimum of 3% contribution

The contract specifies the firm will deduct an employee’s contributions from the salary and then pass them on to the scheme; 

If not, then the company must offer a Stakeholder scheme of modify the current schemes. 

What duties are put on employers?

Employers must choose a Stakeholder scheme that they believe is most suitable for their business. They should consult staff on this matter. 

All details of the scheme must be passed on to employees. 

Once in place, the company has the obligation of administering the scheme. 

At present, neither employers nor employees have to make contributions to Stakeholder schemes.


 
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