Share this content
HRzone
Thinkstock
HRzone

Employers should pay their share of Stakeholder Pensions say TUC

24th Jul 2001
Share this content

Commenting on the reports from the Association of British Insurers (ABI) and Legal and General/Barclays on the take up of stakeholder pensions amongst employees, the TUC said:

"This report shows what we have feared, that without employer contributions people are much less likely to see the value in setting up a stakeholder pension of their own.

"That's why we are calling on the Government to compel employers to make at least some contribution to their employees' pensions.

"In the meantime unions promoting the TUC's stakeholder scheme will be seeking to negotiate employer contributions."

The TUC Stakeholder Pension Scheme, which will be run in conjunction with Prudential, was launched in September 2000.

The survey findings, published by Barclays Bank and Legal & General show a marked variation in stakeholder pensions awareness by employers on a region by region basis.

Awareness of the existence of stakeholder pensions among all employers stands at 85%. Crucially, among employers with five or more staff, those directly impacted by the new arrangements, awareness has now risen to 91%, from 74% in March.

The survey also revealed that only 3 months after the launch date of 6 April 2001, 27% of employers providing employees with access to a pension now have a stakeholder pension in place.

The 85% general awareness figure does, however, mask a number of differences across the country. Whereas 94% of all Scottish employers are aware of the introduction of stakeholder pensions, awareness is only 62% amongst Welsh employers, suggesting a need for greater awareness building in some parts of the UK. In particular, businesses in Greater London, the region nearest to the seat of Government showed a surprisingly low awareness at 76%.

The survey went on to ask employers who do not currently have a stakeholder pension "Do you intend to offer a stakeholder pension?" Of those employing 5 or more staff, 52% said yes and 34% said no. 14% were undecided. Unless the 34% saying no are already exempt*, then they run the risk of being fined up to £50,000 by OPRA for failing to designate a stakeholder pension by the deadline date.

Commenting on the findings, Alistair Camp, Managing Director, Medium Business and Agriculture at Barclays, said:

"While it's clear that businesses have now heard of stakeholder pensions, an alarming number don't seem to be aware of what it means for them. That is why there is still an important role to be played by business support organisations, Government, advisers, pension providers and banks if we are to ensure that all businesses meet their stakeholder pension obligations by 8 October."

Adrian Boulding, Pensions Strategy Director at Legal & General added:

"As an industry we need to work very hard up to 8 October to plug the awareness gap in various parts of the country and translate that awareness into action. I believe that signing up all employers who need to act by 8 October deadline is achievable - Stakeholder pension designation is a simple process. The real task will come after 8 October when we must turn our attention toward populating the schemes with members."

Tags:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.