Stakeholder pensions

Carl Emmerson
Tanner, Tanner

Published on 1 October 1999

The government published its first plans for stakeholder pensions in December 1998. Since then more flesh has been put on the bones with the publication of six disussion papers each focusing on a different aspects of stakeholder pensions -the minimum standards, the employer access requirement, the clearing arrangements, regulation, advice and information, governance and the tax regime. This note summarises - and critically appraises - the government's proposals

Published in December 1998, the government's consultation document Partnership in Pensions contained proposals for stakeholder pensions to be introduced in April 2001.1 Targeted at full-time workers earning between ù,000 and ñ8,500 a year who do not already have a private pension, stakeholder pensions are intended to increase the level of private pension provision among this group. The perceived problem is that not all employees have access to occupational pension schemes, while personal pensions may not be good value for money because of their high upfront charges. Stakeholder pensions will offer a Ѭow cost, flexible and secure' alternative.2 Like all personal pensions, and some occupational pension schemes, stakeholder pensions will be defined contribution schemes. But they will have compulsory minimum standards, guaranteed employer access and a different governance structure. Since June 1999, six discussion papers have been published with further details on different aspects of stakeholder pensions. These cover:

minimum standards;
employer access;
clearing arrangements;
regulation, advice and information;
governance;
the tax regime.

This note assesses each of these discussion papers in turn, summarising their main conclusions and critically appraising the proposed stakeholder reforms.