Scottish Equitable has vowed it will not cherry-pick stakeholder schemes despite a relaxation in DSS rules allowing firms to target lucrative schemes for higher earners.
ScotEq pensions development manager Steven Cam eron, speaking at a pensions roadshow last week, slammed the Government for its policy U-turn and warned that cherrypicking under stakeholder could lead to three years of potential abuse.
The new rules, outlined by DSS head of private pensions John Hughes, state that, alth ough stakeholder sch emes will not be permitted to res trict membership on grounds of financial status or contribution levels, they will be all owed to ban members on grounds of employment, emp loyer, trade or profession.
The DSS says it will review the situation in three years but Cameron warned this would just leave a three-year opening for abuse.
ScotEq says that, in line with the Government's original objective for stakeholder, it will not be placing any restrictions.
Cameron said: “We take business through IFAs and if they want to place business with us, we will accept it. I really do not know why the Government has done this. It simply leaves a window of three years for people to abuse the situation.
“I do not like the idea of cherry-picking and placing restrictions is a no-go for Scottish Equitable. We will not restrict.”
l ScotEq says it could use its balanced lifestyle fund as its stakeholder default fund but the decision is awaiting final confirmation.