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Our advisers understand the legal requirements you need to meet as an employer and can help you fulfil your obligations in as simple a way as possible.
As an employer you may have to provide your staff with access to a stakeholder scheme and you should enquire if this is the case.
Access requires that the company should consult with its employees on the choice of a suitable stakeholder scheme provider and then notify all eligible employees of its final selection.
The company does not have to contribute to the scheme but it has to provide a facility whereby contributions will be deducted from your pay and passed over to the scheme.
All employers must provide access to a stakeholder pension scheme unless they are exempt. The conditions for being exempt are as follows:
- There are fewer than 5 people employed. All employees count for this purpose, including part-time and non permanent workers.
- The company offers all employees access to an occupational scheme that they can join within one year of starting work.
- The company operates a personal pension scheme that meets the following conditions:
- it is open to all employees except those who are defined as ‘non-relevant’ (this term is explained below)
- the company contributes at least 3% of basic salary to the personal pension
- the scheme has no penalties for members who stop contributing or who transfer out to a different scheme
- the company deducts the employee’s payments and sends them to the scheme if requested to do so.
- The company has an occupational scheme which is only open to some employees but the rest have access to a personal pension scheme which meets the above conditions.
There are employees to which an employer need not provide access to a stakeholder scheme if he so chooses. These are known as ‘Non-Relevant’ employees who are anyone:
- whose earnings have fallen below the National Insurance lower earnings limit for at least one week in the last three months;
- who has worked for the company for less than three months;
- who is a member of the company’s pension scheme;
- who is not in the company scheme but was free to join it and declined the offer or opted out;
- who is excluded by the rules from joining the scheme because they are under 18 or are within 5 years of the scheme’s normal retirement age;
- who is debarred from joining a stakeholder scheme because of HMRC restrictions (eg the employee does not normally live in the UK).
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