The 2001 rule waiver that relieved product providers of the obligation to provide daily calculations of stakeholder charges will be extended for a further year, the Department for Work and Pensions has confirmed.
Providers say the fact that they had to ask for the waiver, which was granted after a request from the ABI, shows the risk of bringing in legislation which has not been clearly thought through.
The original 2001 stakeholder legislation, brought in by the Department of Social Security, gave providers the burden of proving the charge on stakeholder contracts did not exceed 1 per cent on any single day of the year.
The ABI successfully argued for the rule to be dropped but the current waiver expires in April.
The DWP has extended the waiver until the implementation of the new breed of stakeholder products in April 2005.
The move comes amid growing industry calls for a year's delay in the implementation of the Pensions Bill – due to come in in April 2005 – because of fears that final regulatory details will not be available until December 2004.
Scottish Life group head of communications Alasdair Buchanan says: “This is a reminder of the dangers of trying to rush rule changes too quickly and the problems caused by unrealistic timetables. You an end up with a fudge that rolls on for years.”