Life Cover Only Members: Stakeholder exemption

All employers must offer all employees access to a stakeholder pension scheme, unless an exemption applies. One of these exemptions meant that an employee who was a member of a life assurance only scheme (or who had life assurance only membership of an occupational pension scheme) did not need to be offered access to a stakeholder scheme.

But the changes to the definition of “occupational pension scheme” affect this exemption (for further details see, Life Cover Only Members: Basics). The Pensions Regulator clearly states that employers with employees in this position should designate a stakeholder scheme.

The Pensions Regulator notes that employers who are affected should have designated a stakeholder scheme by 22 December 2005 (three months from the date the amended definition had effect) and must certainly take steps to do so immediately if previously unaware of the position.