Stakeholder pension schemes after 1 October 2012—an introduction
Produced in partnership with Alistair Hill of CMS
Stakeholder pension schemes after 1 October 2012—an introduction

The following Pensions guidance note Produced in partnership with Alistair Hill of CMS provides comprehensive and up to date legal information covering:

  • Stakeholder pension schemes after 1 October 2012—an introduction
  • Employers' obligations after 1 October 2012
  • Employers who still wish to provide access to a stakeholder pension scheme
  • Statutory requirements for operating stakeholder schemes
  • Eligibility
  • Contributions
  • Requirements for registration as a stakeholder pension scheme
  • Permitted charges
  • Regulation and enforcement of stakeholder obligation

FORTHCOMING DEVELOPMENT: Following the publication of a discussion paper (DP18/1)on the effectiveness of competition in non-workplace pensions (including stakeholder pension schemes), the FCA published a feedback statement exploring some remedies to improve levels of competition. Proposed remedies include introducing a requirement for providers to offer investment pathways which provide ready-made investment solutions and making costs clearer and comparisons easier. The FCA intends to follow this up with a consultation paper in early 2020. See: FCA: Effective competition in non-workplace pensions: FS19/5.

The obligation on employers to designate and facilitate access to a stakeholder pension scheme (as set out in section 3 of the Welfare Reform and Pensions Act 1999 (WRPA 1999)) ceased to apply from 1 October 2012, when the new obligation to enrol workers automatically into a qualifying scheme (introduced by the Pensions Act 2008) came into effect.

However, unless a relevant exception applies (eg where an employer is notified that a designated stakeholder pension scheme has commenced winding up), employers are under a continuing duty in respect of relevant employees to deduct employee contributions to an existing stakeholder scheme from their remuneration and pay them to the trustees or managers of the schemes. In addition, any existing or new stakeholder pension schemes must continue to be operated in accordance with