Stakeholder Pensions (Hansard, 27 June 2002)

§ Mr. McCartney

Firms with five or more employees are required to designate a stakeholder pension scheme for their staff, unless exempted from doing so because they provide an occupational scheme for their work force or allow their staff access to a personal pension scheme to which the employer makes a contribution of at least 3 per cent. of the employee's basic pay. Part of this designation process involves consulting relevant employees prior to selection of a scheme and then notifying them of the name and address of their designated stakeholder pension scheme. They must also allow representatives of the designated scheme reasonable access to their employees in order to supply them with information about the scheme. The Occupational Pensions Regulatory Authority (Opra), which has responsibility for regulating compliance with all aspects of the designation process, has received no specific reports of firms failing to notify employees of their stakeholder arrangements. However it is a matter that they sometimes come across on following up a report alleging non-designation. Reports to Opra tend to be of a general nature rather than alleging a specific breach of one part of the designation requirement. To date Opra has received 361 reports alleging lack of workplace access to a stakeholder pension scheme, of which 327 have been resolved.

Figures on designations of stakeholder pension schemes are not broken down by size of company. However the majority of employers required to designate a stakeholder pension scheme for their work forces are small to medium enterprises. The Association of British Insurers (ABI) has reported that around 322,000 of those 350,000 employers estimated as required to do so had designated a stakeholder pension scheme for their staff by the end of March 2002. This represents a compliance rate of around 90 per cent.