Pension fines may run into billions
As many as half of the UK companies that are required to register with a stakeholder pensions provider may have failed to do so resulting in a potential collective fine running into billions of pounds.
Today is the deadline for the registration schemes, and any company with five employees or more that fails to meet that date risks a fine of up to Pounds 50,000.
According to the latest figures from the Association of British Insurers, during the month of August 25,072 companies registered for the scheme taking the grand total to 121,878.
An ABI spokesman told AccountancyAge.com that a figure for the end of September was not yet known but estimated the total number of companies expected to register at between 300,000 and 350,000.
As things stand, this would amount to a total fine of between Pounds 9bn and Pounds 11.5bn.
Yesterday, the Tories called for a six-month extension to the deadline, saying that as many as 200,000 companies could face a collective fine of Pounds 10bn.
Shadow secretary of state for work and pensions David Willett was reported in the FT saying the fine would represent an ‘unacceptable windfall’ for the government coming at a time when companies needed to pump money into traditional pension schemes to make up for losses on the stock market.
Any individual aged under 75 can invest up to Pounds 3,600 in a stakeholder pension regardless of earnings. Eight million people earning under Pounds 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
Companies risk stakeholder fines
Revenue?s stakeholder pensions site