UK - Large employers are already viewing stakeholder pensions in a positive light, according to the most recent survey by pensions experts Punter Southall.
The findings of Punter Southall’s survey of pension managers from the largest 250 companies in the UK revealed that nearly one third (29%) have put a stakeholder pension scheme in place, even though many already have other existing occupational schemes. Moreover, Punter Southall found that of those employers who have not yet designated a stakeholder scheme, 44% had already approached an adviser or a pension provider for this purpose.
David Segal said: The results suggest that larger companies may be setting up stakeholder schemes either to cater for temporary staff and contractors who are typically not eligible to join occupational schemes or as an alternative top-up mechanism to AVCs. In the long term, what I think we will see is many final salary schemes, in the light of ongoing troubles in equity markets and continuing low interest rates, closing to new members and using the stakeholder which had been running on the backburner as the designated arrangement for new members.
He continued: Although our survey showed that only 44% of those who commented thought that their stakeholder scheme would be used for a significant number of employees, I suspect that partly as a result of the closure of DB schemes, if we repeated our survey in a couple of years’ time, we would find that a greater proportion of the workforce were members of a stakeholder scheme.Companies are required to give their employees access to stakeholder pension schemes by October 8, 2001, unless they can prove that they are exempt. Failure to do so may result in a fine by OPRA of up to £50,000.
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