Stakeholder Pensions Guide

Scottish Life Stakeholder Pension

Providing Help and Guidance

You may give your employees help and guidance, provide extra information or interpret the information – for example outline the benefits of saving for their retirement.

You may give your staff factual information about your designated stakeholder pension scheme

BUT you must not advise them

  • The Financial Services Authority (FSA) strictly controls who can give financial advice, and what advice they can give
  • Every individual must make up their own mind about the best way to save for their retirement
  • You must not tell your employees that they must join your designated scheme
  • A stakeholder pension is just one of pension options available. There may be other options that suit the individual better

The Financial Services Authority (FSA) has devised “decision trees” to help guide people to their own decisions about stakeholder pensions. These take people through a series of questions about their circumstances to help them decide whether a stakeholder pension is the right choice for them.

To obtain copies, contact the FSA on tel: 0845 606 1234 at any time, or visit the FSA web site at

Further information which may be of help to your employees is available from the Department for Work & Pensions (DWP), Pensions Advisory Service (OPAS), The Pensions Regulator, The Financial Services Authority (FSA), and the Her Majesty’s Revenue & Customs Pension Schemes Service.

Once your scheme is up and running, your stakeholder pension scheme provider must send your employees an annual benefit statement. This will enable your employees to make clearer decisions about increasing or decreasing contributions or switching to a different stakeholder plan. The annual statement must:

  • be sent out within three months after the end of the statement year
  • include essential information, such as amount and date of the employee’s contribution as well as the employer’s contribution if applicable
  • show the value of the individual’s pension fund at the beginning and the end of the statement year
  • demonstrate the impact of investment performance on their fund over that time
  • show total charges taken over the period.

Time Limits for Designating a Scheme

Key Dates

6 April 2001

You may begin your stakeholder pension scheme from 6 April 2001, which is the date on which pension providers can start taking payments from members

8 October 2001

Unless you are exempt you must have designated a scheme by 8 October 2001

Changes In Circumstances

If your staff increases to five or more after 8 July 2001 (meaning you have to offer your employees access to a stakeholder pension scheme), you will have three months in which to designate a scheme from the date at which your fifth employee joined

If you become exempt you can stop offering your employees access to a stakeholder pension scheme. However, if your circumstances change and you become liable under the regulations again, you will have three months to offer your staff access to a scheme.

If The Pensions Regulator removes a scheme from the register, the trustees or manager of that scheme will have to name a new stakeholder pension scheme to take over from it. If you accept this replacement scheme you do not need to discuss it with your employees. If you want to designate a different stakeholder pension scheme you will have to consult your employees again. Either way, you must have the new stakeholder pension scheme in place within four months.

The scheme provider must tell you if a scheme to which you are making payroll deductions is taken off The Pensions Regulator register

If you decide to cancel your designation of a scheme, you must designate a new scheme before you leave the first one.

You will have to continue making payroll deductions to the first stakeholder pension scheme if any of your employees are members of that scheme and want you to continue making payroll deductions to it.

Stakeholder Pension Guide Copyright © is4profit Ltd 2000-2008
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