Stakeholder Pensions is a compulsory Government pension scheme which is to be run by employers. It sounds daunting but really is quite simple although has the possibility of being administratively onerous if you allow it to be. At this time there is no direct cost to the employer.
You must offer every employee the option to join and it is up to the employee whether he wishes to do so and even if he says 'not now', he can come in or out at any time. You should appoint your pension company now.
The contribution can in theory change up or down or be missed on any pay day although it is likely that once an employee starts to pay a fixed amount it is unlikely to change unless his circumstances change. The scheme ends for the employee when he leaves your employment.
You can be exempt from the scheme only if you have less than five employees or you operate a Group Personal Pension scheme that meets certain requirements. This would have to be discussed and agreed with an adviser. You must set up the scheme yourself and the best way is through an independent financial adviser who will handle everything for you.
You deduct the amount from the payroll net pay, minimum £20 per month, maximum £3,600 a year which can be a fixed amount or percentage of gross pay (probably the least troublesome) and remit monthly to the appropriate pension company just as you remit PAYE now.
Beware - if you pay late, your employee will be advised direct by the insurance company. The method the insurance company requires the information to be presented is not yet clear and will probably vary with each company, but basically a monthly return of names and amounts with remittance is the minimum requirement.
The scheme will be overseen by OPRA and any penalties will be payable personally by a director or the proprietor - NOT the company.
Our payroll software has now been upgraded ready for Stakeholder Pensions (and other payroll statutory changes).
