ABTA warns overpension changes

New rules force agencies employing five or more to provide schemes

ABTA warns overpension changes

Report by TANYA JEFFERIES

ABTA is urging agents who employ five staff or more to set up a stakeholder pension scheme in line with regulations that come into effect on Friday.

In practice, employers have until October 8 to comply with the new rules, but if they deliberately avoid them after this date, they could face fines of up to £50,000.

Under the new regime, employers have a duty to find a registered stakeholder pension scheme, put its employees in touch with it, allow payroll deductions for employees who decide to contribute and maintain records of deductions and payments. However, they are not required to pay contributions towards the pensions unless they want to, possibly as a means of recruiting or retaining valuable staff.

ABTA said that many agents are small employers that fall squarely within the category of businesses to which the new regulations apply. It stressed that those who have not yet set up a stakeholder pension scheme for staff should look into the issue immediately.

Membership services manager Victoria Poland said: “Agents don’t have to put anything in the schemes themselves but it is incumbent on them to make one available to staff.”

She said ABTA looked into a number of stakeholder schemes to find out which offered the best terms for agents.

The organisation is unwilling to recommend any particular option formally, but it has given its approval to the AXA Sun Life Stakeholder Pension scheme.

This charges individual pension holders a 0.8% annual management fee compared with the maximum level of 1% set by the Government.

&#42 For further information on stakeholder pensions, call the Inland Revenue Employer’s Helpline on 0845 714 3143 or visit the Department of Social Security’s Web site at www.dss.gov.uk.

AXA Sun Life can becontacted on 0845 300 1632.

See Comment page 8

Future perfect: employers will be obliged to provide pension plans

Future perfect: employers will be obliged to provide pension plans