Employers risk failing stat utory requirements on stakeholder exemptions for group per sonal pension schemes unless they are advised on the latest update from the Department of Social Security.
Scottish Equitable says it has information from the DSS confirming that emp loyers with GPPs need to continually offer their employees a chance to join its GPP to be exempt from offering access to a sta keholder scheme for non-joiners.
This is different from the rules for occupa tional schemes, where an emp loyer can gain exemption from offering access to stakeholder if all its employees have been given the chance to join at some point in the past, even if they chose not to.
The DSS has confirmed to ScotEq that, for a GPP to exempt the employer from offering stakeholder, an offer of a 3 per cent basic pay employer contribution must remain open to all relevant employees.
This means an employee who initially turns the offer down is able to take it up at a later stage.
Therefore, emp loyers need to advise their staff of their open-ended right to join.
ScotEq pensions development manager Steven Cam eron says: “It is important that IFAs make all employers with exempting GPPs aware of this update to avoid them falling foul of Opra requireme nts.
“As well as advising all employees not later than Oct ober 8, 2001 of their right to join, employers might also want to issue an annual rem inder to those employees who had elected not to join the GPP, that they can do so at any stage.”