CONSTRUCTION firm bosses are being given the chance to find out more about reforms to pension schemes, which will affect companies across the North East.
Stakeholder pensions schemes (SHPs) were launched back in 2001 by the Government as a way to actively encourage employees to start saving for their retirement, but have they seen much success?
A type of personal pension plan that adheres to statutory minimum standards, stakeholder schemes have strict rules surrounding charges and accessibility. By choosing and implementing a stakeholder scheme, a company can have a scheme that best meets their specific needs. In fact, stakeholder schemes are about to benefit from a considerable boost by the introduction of automatic enrolment that will effectively create a substantial fresh inflow of new members as well as providing contributions from both employees and their employers.
Stakeholder schemes provide a low cost, flexible and secure option for employers and are set up to accept low-value and irregular payments. While other personal pension schemes may impose penalties for irregular payments, by law a stakeholder pension scheme cannot penalise its members for stopping or missing contributions.
And for every employer with five or more eligible employees and no company pension scheme in existence for them, the employer must designate a stakeholder pension.
Automatic enrolment will provide the missing ingredient that many stakeholder pension schemes have needed and through its introduction, the Government will finally be providing the missing catalyst for their widespread success.
As an example, the uptake B&CE has seen with its workplace pension EasyBuild – a stakeholder scheme itself, within the construction industry – demonstrates exactly what can be accomplished by well managed, stakeholder schemes.
Stakeholder schemes have already been designed to make saving for retirement simple which is vital as the Government estimates some seven million people are currently under-saving towards their own retirement.
From 2012 stakeholder schemes will benefit from auto-enrolment and an employer having to make contributions where an employee contributor themselves will support the success of such a scheme.
B&CE is hosting its next seminar on the morning of Thursday, May 26, at Allergate House, Belmont Business Park, Durham, looking at the implications for employers.
The seminar is free for Constructing Excellence members to attend and is an opportunity to ask questions in an informal environment, obtain some useful guidance on how to tackle potential challenges and network with other delegates and speakers. To register your interest or find out more, please contact Leanne McAngus on 0191 374 0233 or leanne@cene.org.uk.
Steven Ord is relationship manager at B&CE Benefit Systems.