Sunday 7 October 2012

Goodbye Stakeholder Pensions



I have previously mentioned the implications of the new autoenroll pension provisions. Well now with effect from 1st October 2013 the obligation to give access to a stakeholder pension has been repealed. 

The old rules said that a UK employer with five or more employees had to give access to a stakeholder pension scheme - but no more. There are some transitional provisions which allow an employer to continue deducting contributions from the salary of an employee who is an existing member of a stakeholder scheme after 1 October 2012, but if an existing member asks his employer to stop the deductions, the employer must tell the employee that it is no longer required by law to deduct contributions and pay these to the scheme on his behalf, but that the employee can still make payments directly to the scheme, provided this is permitted by the scheme rules. 

I was expecting this change to be linked directly with the staggered introduction of auto enroll but I suppose that would have involved some really joined up thinking!

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