PracticeConsultingCompanies risk stakeholder fines

Companies risk stakeholder fines

With the deadline looming, less than a quarter of companies obliged to offer thier employees stakeholder pensions, have a designated scheme in place.

A study by the Association of British Insurers found only 88,394 companies out of the 400,000 contacted by the government had made the necessary preparations for stakeholder pensions by the end of June.

The deadline for schemes is 8 October, and any company with five employees or more that fails to meet that date risks a fine of up to £50,000.

Data from the ABI revealed almost quarter-of-a-million stakeholder pensions were sold in the first three months since they were launched in April.

Despite the larg number which have not put procedures in place for these schemes, the ABI remained upbeat about the figures. The organisation said a more accurate picture of sales of stakeholder pensions to new customers was likely to emerge in the coming months.

And Mary Francis, director general of the ABI, described the news as ‘encouraging’, adding that employers would ‘pay a key role in the autumn in boosting take up of stakeholder pensions’.

Any individual aged under 75 can invest up to £3,600 in a stakeholder pension regardless of earnings. Eight million people earning under £30,000 a year will be able to contribute to a stakeholder pension and continue to belong to their employer’s defined benefit pension scheme.

Links

Stakeholder pensions warning for FDs

Q&A: Stakeholder pensions

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