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GPPs set to benefit from &#39restricted&#39 stakeholder

Scottish Equitable is pred-icting that difficulties over providing

stakeholder plans could tip the balance in fav-our of group personal

pens-ions for many employers from next April.

The life office believes the restrictions and conditions surrounding

stakeholder will lead to a very limited uptake among smaller and

medium-sized employers. It suggests many will opt to take the GPP route

when planning pension provision for their staff.

From next year, all employers with five or more staff must offer their

employees access to some form of pension.

Pensions development director Stewart Ritchie says there are a number of

issues which tip the balance towards GPPs.

He cites the problem of not being able to offer a true with-profits fund

under stakeholder as one area of contention, claiming it is a “natural

investment choice for many investors”.

He also highlights how the employer has to consult staff and potentially

trade unions before adopting a stakeholder scheme whereas this is not

necessary for a GPP.

Ritchie believes decision trees could also hold pitfalls if they fail to

provide clear guidance. By providing a GPP, employers can avoid this

problem as individual advice is part of the overall package.

Ritchie says: “Stakeholder is being loaded up with hassle, particularly

from a small or medium-sized employer&#39s point of view. The restriction the

Government is putting on stakeholder means that for many employers the

easier and better choice will be to opt for a GPP.”

GPP opportunity, p58


Unqualified staff could open huge can of worms

I hope the idea of putting everything into a decision tree does not catch on.I have been trying to draw up my own decision tree for deciding thesubjects which I write about in my Money Marketing column. Unfortunately,most of the branches seem to end up in a box marked: Why not go down thepub?Come to […]

Parliamentary troups urge B&B members to vote for mutuality

Two influential Parliamentary groups are lending their support tocampaigners aiming to keep Bradford & Bingley a mutual.The all-party Building Societies Group and Insurance & Financial ServicesGroup say members interests will be damaged if the society converts to apublicly owned company.The two groups represent more than 170 MPs from all political parties.The groups issued a statement […]

Reasons to be fearful

IFAs fear being hit with another increase in the admin burden followingFSA proposals for intermediaries to write “reasons why not” letters toclients if they do not recommend a stakeholder.IFAs and trade bodies are concerned this will set a dangerous precedentfor regulation of independent advice.But the FSA says the move could be necessary to protect intermediariesagainst […]

Woollard faces a carpeting in House of Lords

Carpetbagger-in-chief Fred Woollard is to come under attack in the Houseof Lords during the last week of campaigning over the future of StandardLife.Labour peer Lord Faulkner of Worcester plans to raise a debate aboutmutuality in financial services.He hopes to touch upon what he sees as the benefits of mutuality forconsumers and point out the weaknesses […]

Seeking quality in uncertain markets

By Ewan McAlpine, Senior Client Portfolio Manager In uncertain times, investors naturally seek safety. But in fixed income markets, what does that really mean? Ewan McAlpine outlines the approach RLAM’s Fixed Income Team will be adopting across its credit funds in response to potentially volatile markets this year. Click here for full article


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