The Department of Social Security could benefit financially from introducing stakeholder pensions if ...
Employers without a stakeholder pension scheme in place by the deadline date for introduction of 8 October run the risk of investigation from the Occupational Pensions Regulatory Authority and a potential fine of up to £50,000.
Insurer Legal & General estimates government coffers could be some £4bn better off as a result if small companies fail to get stakeholders up and running by the deadline date and have to pay a fine.
Monitoring of stakeholder pensions effectively extends the powers of OPRA, which is already responsible for supervising the workings of occupational pension schemes and imposing fines when necessary.
"Small employers have got to get their act together if they don't want to fall foul of the stakeholder legislation and up paying part of this huge fine to the Exchequer," says L&G spokesman Adrian Boulding. "This figure should act as a wake up call to employers."
Based on a survey conducted by Taylor Nelson Lofres for L&G, it is estimated that more than 424,000 firms in the country with between five and 49 staff do not currently offer or plan to introduce a scheme.
However, the good news is that 31% of the firms surveyed who said they planned to seek advice said they contact an IFA for further information while a smaller figure, 29%, said they would contact a bank, according to Legal & General.
‘Important to have an anchor’
Report to be written by TPR
Lack of innovation for solutions
Some 2,000 consumers affected