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Posts Tagged ‘Company Pensions’

Stakeholder pension designation requirements repealed on 1 October 2012

Tuesday, October 9th, 2012

Pension auto enrollment kicked in for the largest companies on 1 October. The requirement on a UK employer employing five or more employees to designate and facilitate access to a stakeholder pension scheme has been abolished as part of the same legislation.

Transitional provisions 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. 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.

The repeal of the stakeholder requirements has not been aligned with the staging timetable for the new auto-enrolment duties, which do not affect the smallest companies until 2017. The effect of this is that an employer will no longer be obliged to provide access to a pension scheme until it becomes subject to the duty to auto-enrol its eligible jobholders under the legislation staging process.