Prudential has teamed up with the TUC to offer a stakeholder product to union members.
The TUC hopes the reputation of the Pru coupled with the TUC's stamp of approval, will dispel any concerns about investing in a stakeholder.
The product will be geared towards the 500,000 affiliated TUC members who are not members of an occupational pension scheme and 5.5 million union members as a top-up to occupational schemes.
The TUC stresses occupational pensions are the most efficient way to provide for retirement but says stakeholder plans are workable, despite its criticism of the fact that employer contributions are not compulsory.
The features of the Pru TUC stakeholder are a charge of less than 1 per cent and a range of investments including an ethical fund and external links.
The Pru was chosen after a six-step selection process which involved over 40 providers. A questionnaire was followed by detailed tendering, an examination of back-office operations, an indepen- dent assessment, presentations, interviews and references.
Pru group chief executive Jonathan Bloomer says: “The TUC's long tradition, combined with Prudential's expertise as the UK's biggest pension provider, is a strong foundation on which to build a high-quality stakeholder pension scheme.”
TUC general secretary John Monks says: “Our goal is to ensure the TUC stakeholder pension scheme is the best on the market – the one against which other stakeholder pension schemes will be judged.”