Signing up a stakeholder pension will not be as simple as opening a web page or signing a form at...
Signing up a stakeholder pension will not be as simple as opening a web page or signing a form at a local supermarket, because members are required under law to go through through a complex identification process, writes Jenne Mannion in Investor's Week.
Anti-money laundering measures also apply to all new personal pensions contracts, including stakeholder pensions, which means up to four examples of identification, with proof of address, may be required to sign up to a stakeholder, as well as other money purchase arrangements.
Types of identification required include passports, utility bills, and banks statements.
Alisdair Buchanan, head of communications at Scottish Life, says stakeholder and other personal pensions are no longer exempt because of new rules - introduced earlier this year - that allow up to £3,600 a year to be contributed into a pension from non-earners, such as spouses and carers.
Proof of earnings was previously required for pension contributions, which meant pensions were exempt from the Treasury's anti-money laundering regulations.
"The requirement to issue identification, provides problems for advisers and providers, as well as individuals. There is no great reason for this to be done and people likely to sign up for stakeholder are unlikely to benefit from money laundering," says Buchanan.
"Some people find it difficult to get sufficient identification altoghether, and it means that signing up for a stakeholder won't be easily done over the internet, or at sales points like Tesco," he adds.
Buchanan expects the requirement for additional identification will prove a barrier for sales, which goes against the government's objective of encouraging people to save for their own future.
Full details of the new rules were disclosed in January when the Financial Services Authority unveiled its role and policy in the fight against money laundering.
Although it is not certain, occupational schemes look likely to be exempt from the money-laundering rules.
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