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85% of B&CE stakeholder plans are shell schemes

B&CE, which claims to be the biggest stakeholder pension provider, has revealed that 85 per cent of its plans are effectively shell schemes getting only £1.90 a week in employer contributions.

Less than 15 per cent or 27,000 of the life office&#39s 185,000 schemes are getting combined employee and emp-loyer monthly contributions of £50 to £100 but the vast majority do not get anything but token payments.

But the not-for-profit prov-ider, which offers pensions to blue-collar workers in the construction industry, says the situation will get better when it introduces a “negative opt-out clause” on its schemes from February next year.

This means employees will have to sign a document to opt out of a scheme or will join up automatically.

With about 6,000 employees joining the industry every month but only 1,000 entering the scheme, B&CE says the move will mean a significant number of new workers getting occupational pensions.

Deputy chief executive John Jury says: “The biggest benefit of the negative opt-out is that about 5,000 individuals a month will be able to take advantage of their employer&#39s contributions.”

Venn Watson financial advi-ser Alistair Watson says: “Most employees in that scheme are completely oblivious to the fact that the contributions they are receiving are so minimal. The impression they are under is that they will have a retirement income waiting for them.”

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