Stakeholder Pensions

[djprescott]

I am an employer and we have been providing stakeholder pensions for a few years now. I have just been informed by our pension provider that they will now be charging us an admin charge for each employee on the scheme. Can they do this? All this will do is push the costs onto the business.

[PeanutsUK]

I recently had a meeting with our company's independent adviser regarding starting a pension plan (I'm an employee). I asked a lot of questions thoughout; one of which was why was I offered a stakeholder pension (and what the hell was it!!). He told me that by law the company had to offer a minimum pension scheme; my company had opted for a scheme which involved him (the personal advisor) organising full pensions with the employees (if they wanted it) and that that's how the company avoid paying administration fees (after all, each employee pension plan includes an administration fee to the provider); it's more cost effective for the business that way. I would advise shopping elsewhere if they are asking you for the charge per employee, as there will be hundreds of others clawing for the business in their place!!

[djprescott]

Employers with 5 or more employees have to provide stakeholder pensions by law. However the idea behind the S/Pension is to provide a pension at a low cost, hence the problem, the pension providers cannot make money providing these plans. When we starting offering the pensions, we have about 10 employees on the scheme, we were not told there would be an admin cost. This is just another case of the government pushing cost onto the employer.