ABI memos claiming that Inland Revenue chaos poses a threat to the launch of stakeholder have evoked mixed feelings among IFAs and product providers.
According to two memos leaked to Money Mark eting last week, unless regulatory and systems problems are resolved, stakeholder will not be ready for its launch in 2001.
The first memo declares that the proposed rules for personal pension transfer benefits are based on old actuarial assumptions and that taxation regulations need to be finalised urgently.
The second memo claims there are problems with proposed annual benefit statements for all money-purchase schemes and that changes to the basis of projections used will only give rise to significant system costs.
The problem could be com pounded after research conducted by Torquil Clark, as reported in Money Mark-eting, found that the stakeholder bill for businesses could already be £1.6bn – much higher than was originally assumed.
Any more rising costs, as suggested in the second memo, could lead to firms becoming disillusioned with the stakeholder scheme.
To add to the confusion, pundits are now predicting that a general election could happen as early as April, distracting senior civil servants and ministers.
Commenting on the memos, Scottish Life head of communications Alasdair Buchanan says: “A lot of work needs to be done if the details are to be finalised in time.
“It will harm the credibility of stakeholder if there is a delay. This is not in the interests of IFAs, the product providers or the consumer. This is a very serious matter and must be resolved quickly if there is to be a smooth introduction of stakeholder pensions.”
But IFA Adam Hackett and Brown partner Ian Hackett takes a different view. He says: “I agree in principle to the introduction of stakeholder pensions but there have been problems.
“Maybe a delay would be a good thing as it would give businesses and product pro viders more time to get their resources in order.”
IFA JP Appleby director John Appleby agrees. He says: “It would probably be a blessing in disguise if stakeholder schemes were delayed. IFAs and product providers would be given more breathing space. We need this because stakeholder has provoked a mixed reaction among everyone.”
However, Clerical Medical pensions strategy manager Nigel Stammers believes the memos are nothing more than scaremongering on the part of the ABI.
He thinks the Cassandras will be proved wrong and that the launch date will be met.
Stammers says: “If there is a delay to the launch of stakeholder it will not be down to taxation regulations. We have lived with these being out of date for some time and will continue to do so.
“Never theless, I hope the finalisation of tax rules can be done in time because any delays in providers' marketing plans will be costly and give the wrong message about stakeholder pensions to consumers. Stakeholder is definitely a good thing in the right market and everything should be done to get it right.”
Inland Revenue communications officer Abigail Elshaw plays down concerns from the two memos, saying: “We would say there is no need for IFAs, product providers or consu mers to be worried. Tax regulation does need to be finalised but we see no reason why stake holder pensions will not be launched in April as planned.”