Article date: 20 April 2001
Business face heavy fines if they fail to set up a pensionscheme by October 2001
Every business in the UK with 5 employees or more and no pensionprovision in place, may face heavy fines if they fail to ensurethat staff have access to a stakeholder pension before8th October this year.
Stakeholder pensions were launched by the Government on 6 Aprilthis year. Designed to provide simple and affordable pensionsolutions to all those who currently have no retirement provision,they have a minimum contribution of only £20, are very flexible andcan be stopped and started at any time.
More than 300,000 small businesses in the UK have between5 and 20 employees making up 13.8% of the total UK workforce. Thesebusinesses range from small accountancy firms and estate agents topublic houses, garages, plumbers and electricians.
Employers will face fines up to £50,000 if they do not meet thelegal requirements. To help ensure employers are complying withstakeholder legislation, Norwich Union, the UK's largest insurer,has produced a straightforward guide, 'Stakeholder PensionsDesignation - Employer's support pack', which explains the processin detail. The packs are available to employers by calling 0845944 4807* or through your independent financial adviser.
Alternatively employers can find everything they need to know ona dedicated interactive website, www.your-pension.com/employer which will also acceptdesignations on-line.
Iain Oliver, Head of Corporate Pensions at Norwich Unioncommented "We are very conscious that this extra legislation willbe a significant worry for small businesses, who have enough toworry about without the added complication of arranging pensions.We want to convey to all those who will be affected, whetherelectricians, plumbers or mechanics, that they don't need to losesleep over stakeholder or trawl through tomes of governmentregulation.
"Norwich Union has created a simple, flexible package foremployers that removes all administration headaches. We have a verybroad range of stakeholder pension products that were designed withsmall businesses in mind, offering the added option of EmployeeBenefits and Contribution Protection. Once employers havedesignated Norwich Union as their provider, employees will haveaccess to a quality pension product with the UK's largestinsurer."
*Calls are charged at local rate and lines are openMonday-Friday, 9am-5pm.
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Notes to Editors
- CGU plc and Norwich Union plc merged on 30 May 2000 to createCGNU plc, the UK's largest insurance group and one of the top-fiveinsurers in Europe with substantial positions in other marketsaround the world, making it the world's sixth largest insurerbased on gross worldwide premiums.
- CGNU's principal business activities are long-term savings,fund management and general insurance, with worldwide premiumincome and retail investment sales from ongoing business of over£27 billion and assets under management of more than £210billion.
- Since October 2000, the combined life and pensions, generalinsurance and retail fund management businesses in the UK haveoperated under the Norwich Union brand, while the institutionalinvestment business operates under the Morley Fund Managementbrand.
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