Employers with 5 or more employees are not required to choose and provide access to a stakeholder pension plan. However, where an employee is already a member of a stakeholder pension plan (having had one regular contribution to the plan deducted from their salary before 1 October 2012), the employer is still under a duty to deduct and pay over the employee's pension contributions.
Stakeholder schemes must be registered with HM Revenue & Customs and with the Pensions Regulator.
Some employers must automatically enrol eligible jobholders into a pension scheme. Employers can use their existing scheme, a new scheme or NEST (which has been set up by the Government).
Auto-enrolment is taking place in stages. The staging dates depend on an employer's size (based on PAYE as at 1 April 2012). Staging will continue until 2018, ultimately covering all employers.
Mandatory contributions, which will eventually reach 3% for employers, are also being phased in over the same period.
Employees may opt-out of the auto-enrolment scheme.
For more information, see the(PDF) from the Pensions Regulator, who also offer a number of other useful .
Also known as works pension, company pension, or superannuation, occupational pension schemes are set up by employers for their employees in contrast to stakeholder pensions where employees purchase investment into a stakeholder scheme. The occupational pension scheme is managed by a board of trustees who are responsible for ensuring payment of benefits. There are two types of occupational pension schemes:
In either case the employer has to pay for a substantial part of the administration costs of the pension scheme, by law.
This is a complicated area and tax relief may be available to employers who contribute to an occupational pension scheme that is approved by HM Revenue and Customs.