Head of the financial services division Stephen Humphreys said many businesses ‘have only taken a cursory look at the new rules’.
He added that many companies believed they were not affected by stakeholder pensions because they already had an existing pension scheme in place for their staff.
These companies, which already have a staff pension scheme in place, wrongly believe they do not have to provide employees with the option of a stakeholder pension under exemptions to the regulations.
Existing pension schemes, however, do not satisfy the conditions for exemption as they only allow employees to join after two or three years in employment. Under the new rules, in order to gain exemption from a stakeholder scheme, employees must be allowed to contribute to an occupational scheme after a minimum of twelve months employment.
In addition, Humphreys said: ‘Company pension schemes need to contribute at least 3% of basic pay, ensure that there are no exit charges and provide access to the scheme for employee contributions after three months service.’
He added that changing the existing pension scheme to comply with regulations was not necessarily the cheapest way for companies to respond, as they would need to make additional contributions on behalf of their employees.
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