Stakeholder Pensions
The Government issued a Green Paper in December
1998, entitled:
"A New Contract for Welfare: Partnership
in Pensions"
Most financial commentators agree that this was
the first of many steps involved in shifting the Nation's pension
funding costs away from the State, onto the Employers. The concepts
outlined in this paper have now resulted in legislation requiring
all Employers to consider setting up Stakeholder Pension schemes
for their workforce.
Our financial services subsidiary, Whiting &
Partners Wealth Management Limited, is able to advise clients
on how these new rules affect them. In particular, some Employers
may be able to claim advantage of the available exemptions, to
keep them outside of these rules. This will depend upon:
- How many employees the business has,
- How much these employees earn,
- Whether you offer these employees membership of a pension
scheme already.
If no exemptions can be claimed, since October 2001,
employers should have complied with the new rules, by setting
up a Stakeholder Pension scheme.
"Clients should talk to us early", commented
Tony Locke, pensions specialist at Whiting & Partners Financial
Services Limited. "In some cases, it may be possible to amend
existing pension arrangements to make them comply with the precise
criteria that the new Stakeholder legislation imposes. In most
cases, however, new schemes will need to be set up, to give employees
the opportunity to make contributions, via deductions from their
wages. Despite the hype surrounding this subject, clients should
be made aware that, currently, there is legal no requirement for
Employers to contribute into these schemes."
Many believe that the inevitable next step, once
these schemes are up and running, is for Government to require
Employers to make contributions into such schemes.
Other Practical Examples of our Pensions Expertise
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- Holding farm land within a SSAS as an inheritance
tax planning exercise.
- Loaning money back from a cash rich SSAS to the principal
employer.
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