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Thousands face exclusion from stakeholder

Pension experts warn the Government risks excluding a huge chunk of its

five million stakeholder target market through its new regulations.

They claim that hundreds of thousands of employees could miss out on

pension provision because their employers have become exempt from

stakeholder as they have an occupational scheme.

But because the employee had previously refused to join the scheme, the

employer may refuse to offer them the chance to join the scheme in the


This could lead to thousands remaining unpensioned, defeating the

Government&#39s primary stakeholder objective of increasing pension provision

among the employed.

Under the Department of Social Security&#39s final regulations, companies are

now only required to make some form of pension available to their

employees. If they offer an occupational scheme, they can become exempt

from the burden of setting up an additional stakeholder scheme.

There is no obligation for them to re-offer membership of the scheme to an

employee who initially refuses to join.

Providers are calling on the National Association of Pension Funds to urge its members to re-open their plans to these employees but the NAPF says this must be down to the individual scheme.

Technical manager David Astley says: “Different schemes have different

philosophies over whether to give employees a second or even third chance

to join their scheme.”

Scottish Equitable pensions development manager Steve Cameron says: “This

appears to create a huge gap in the Government target to get those without

pensions into pensions.”


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