What are stakeholder pensions?

They are pension schemes that were introduced on 6th April 2001. If you employ five or more people and you do not currently offer a suitable pension scheme, you must formally designate a stakeholder scheme for your employees. Any employer caught by the stakeholder requirements, for example as a result of taking on a fifth employee, will have three months to designate a scheme.

Designation does not mean that you have to contribute to the scheme but you must allow employees to contribute by payroll deduction.

You do not have to provide access for any employee who has worked for you for less than three months or earns less than the National Insurance lower earnings limit.

If I have to designate a stakeholder pension scheme what must I do?

	You must choose a registered stakeholder pension scheme like the NFU Mutual Stakeholder Pension Plan.
	You must give your employees and any organisations representing them some information about the Plan and discuss your choice with them.
	You must formally designate your preferred stakeholder scheme and then give the relevant employees the name and address of the scheme.
	We will supply booklets covering the key features of the plan and if necessary our Financial Consultants will talk to any employees who need financial advice.
	You must set up payroll deduction facilities for those who wish to contribute.
	You must make sure you make any payments to NFU Mutual on time.
	You must keep records of the employee deductions and payments to the Plan.
	You must check regularly that the NFU Mutual Stakeholder Pension Plan is still registered as a Stakeholder Pension Plan. An annual statement will be sent to you confirming if the NFU Mutual Stakeholder Pension is still registered.

What information about the NFU Mutual Stakeholder Pension Plan must I give to my employees and their representatives?

You must tell them NFU Mutual's name, address and telephone number. Our e-mail address and your local NFU Mutual contact might also be useful. NFU Mutual will provide you with leaflets for you to give to your employees.

You must not give your employees any advice as to whether or not they should join the NFU Mutual Stakeholder Pension Plan. NFU Mutual will provide you with documents giving information about the Plan for you to give to your employees.

How are contributions paid to the NFU Mutual Stakeholder Pension Plan?

You must offer the facility to deduct your employees' stakeholder pension contributions from their pay and forward the contributions to NFU Mutual on their behalf. However, your employees can choose to pay their pension contributions directly to us if they wish.

Who decides how much my employees contribute?

Your employees must each decide if they wish to contribute to the NFU Mutual Stakeholder Pension Plan, and if so, how much they wish to contribute and how often.

There is no minimum contribution to the NFU Mutual Stakeholder Pension Plan, and contributions can be made weekly, monthly or at other intervals. One-off payments can be made at any time.

The contribution amount deducted from pay can either be a fixed sum or a percentage of gross pay. However, we would encourage regular fixed amounts in order to minimise your administration burden.

Are there any rules governing changing the amounts an employee contributes?

You must decide yourself on the process and the rules (subject to certain conditions below) you want to apply if one of your employees requests a change to the amount he contributes to the Stakeholder Pension Plan. You must explain what these are to your employees. Things you may wish to consider include:

	How does the employee tell you he wants to change or stop his contributions - e.g. by telephone, in writing or in person.
	Who must he contact about changes to his contributions.
	How often are you willing to allow him to change his contribution.
	How much notice is required (see Section 2).

Statutory conditions:

	The amount the employee contributes can be changed at the individual employee's request.
	You are not obliged to agree to a change more than once in any six month period, although you can if you wish.
	Notwithstanding any limit on how often you are willing to accept changes to an employee's contributions, the employee can ask for payroll deductions to stop at any time.
	Any change must be made no later than the pay period after the one in which they made their request.
	If you refuse to accept the employee's request to change the amount contributed, then you must write to the employee and explain why. If the request has been refused because more than one change has been made within the last six months and you are not willing to accommodate this, then you should tell the employee when they can next request a change.
	You cannot make any charge for making changes to the amount an employee contributes to a stakeholder pension scheme or if the employee wants to stop paying into a stakeholder pension scheme.

How do I pay the contributions to NFU Mutual?

Contributions can be paid by cheque, direct debit, direct credit or standing order. Given the statutory time limits described in Section 2, for smaller schemes we recommend direct debit and for large schemes where the employer is registered with BACS, we recommend direct credit. Direct credit payments should use the standard BACS payment record for making stakeholder contribution payments.

What if one or more of my employees want to contribute to a different stakeholder pension scheme?

You are not obliged to offer payroll deductions into any stakeholder pension scheme other than one you have designated. However, you can offer to make payroll deductions into the plan if you wish.

What if I decide to designate a different stakeholder pension scheme?

You can designate more than one stakeholder pension scheme if you want to, but if you want to cancel your designation of the NFU Mutual Stakeholder Pension Plan, you must have designated at least one other scheme first.

If you cancel your designation of the NFU Mutual Stakeholder Pension Plan, you must continue to provide a payroll deduction facility into it for those employees who do not wish to redirect their contributions into the new scheme.

What must I do if the NFU Mutual Stakeholder Pension Plan is no longer registered as a stakeholder pension scheme?

You are responsible for checking, at reasonable intervals (we suggest once a year), that the scheme is still registered as a stakeholder pension scheme. This aside, we will inform you ourselves if the NFU Mutual Stakeholder Pension Plan ceases to be a registered stakeholder scheme.

If this were to happen, you would have four months in which to decide on a new stakeholder pension scheme to designate for your employees.