Know your legal obligations on pensions

Providing a stakeholder pension - key steps

Employers have certain legal obligations to meet. They must:

• choose a stakeholder pension scheme from the pensions regulator's list of registered stakeholder pension providers
• consult with the employees on the business' proposed choice of stakeholder scheme
• designate a stakeholder pension scheme as the one to which the company will give its workers access
• give the scheme's contact details to the workforce
• allow the designated stakeholder pension scheme provider access to employees at the place of work
• make payroll deductions of pension contributions for those employees wanting to pay into the scheme
• keep a record of the deductions and forward any contributions to the stakeholder pension provider

Look for a stakeholder pension scheme at the pensions regulator website.

Employers may want to consult a professional adviser before they choose which stakeholder pension is right for them.

You may also wish to offer your employees access to pensions advice and information. From 6 April 2005 this can be done without incurring a tax charge providing that this advice or information is offered to all employees and costs the employer less than £150 per employee per year.

As an employer, you do not have to make contributions to your employees' stakeholder pension. They do not have to make contributions either. If employees decide to opt out of the State Second Pension, they will get a rebate of their National Insurance contributions together with tax relief paid directly into their pension scheme from HM Revenue & Customs.

Subjects covered in this guide

• Introduction
• Occupational pensions
• Personal pensions
• Stakeholder pensions
• Contracting out of the State Second Pension and paying Additional Voluntary Contributions
• Must I provide a stakeholder pension?
• Providing a stakeholder pension - key steps

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