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The Stakeholder Pension Schemes Regulations 2000

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Exemptions from employer access and consultation requirements

22.  (1)  An employer need not comply with the requirements set out in section 3 (duty of employers to facilitate access to stakeholder pension schemes) and this Part of these Regulations if he has fewer than 5 employees.

(2) An employer need not comply with the requirements set out in section 3 and this Part of these Regulations if—

(a)it is a term of the contract of every relevant employee (other than any employee who has not attained the age of 18) that—

(i)the employer will make contributions to a personal pension scheme in respect of the employee, in accordance with paragraph (3) and subject to paragraph (4), for any period for which that employee, while in his employment, is a member of that scheme; and

(ii)the employer will, if he is requested to do so by the employee, deduct the employee’s contributions to that scheme from his remuneration and pay them to the trustees or manager of the scheme; and

(b)subject to paragraph (7), no charge or penalty is imposed by the personal pension scheme in question on any member in respect of whom the employer has made any contributions to the scheme for transferring all or any of his funds out of that scheme or for ceasing to contribute to the scheme.

(3) Contributions are made in accordance with this paragraph if they are made on each occasion on which the employee is paid remuneration by the employer (or, if the employer and employee agree longer intervals, at such longer intervals as are agreed) and at a rate of at least 3 per cent. of the amount of remuneration paid.

(4) Contributions made by the employer in accordance with paragraph (3) may be conditional on the employee making contributions to the same scheme at a specified rate on each occasion on which he is paid (or, if the employer and employee agree longer intervals, at such longer intervals as are agreed) while—

(a)if the arrangement is in place as at 8th October 2001, the employer is making contributions equal to or exceeding that of the employee; and

(b)if the condition is first imposed on or after 8th October 2001 or if sub-paragraph (a) ceases to apply after that date, the employee is not required to make contributions exceeding 3 per cent. of the amount of remuneration paid to him on any such occasion or for each such interval.

(5) For the purposes of paragraphs (3) and (4) only payments made in respect of basic pay shall be taken into account and payments in respect of bonuses, commission, overtime or similar payments shall be disregarded.

(6) In calculating the amount paid to an employee for the purposes of paragraphs (3) and (4) no account shall be taken of any deductions from the employee’s remuneration which are made in respect of tax, national insurance contributions or pension contributions.

(7) For the purposes of paragraph (2)(b) deductions in the member’s acccrued rights to take account of—

(a)costs or charges that have not previously been taken into account and which would otherwise have been deductible under the terms and conditions of the scheme by the trustees or manager of the scheme in question, had contributions continued or a transfer not occurred, in respect of the member’s rights under the scheme on or before the day the cessation takes effect or the day that member’s rights are transferred from that scheme; or

(b)market value adjustments which occur in relation to a with-profits fund,

shall not be taken to be charges or penalties for transferring those funds or for ceasing to contribute to that scheme.

(8) An employer need not comply with the requirements set out in section 3 and this Part of these Regulations if the employer can provide written evidence to show that contributions are being made, and have continuously been made from a date prior to 8th October 2001, as if each relevant employee had a term in his contract that would satisfy the requirements set out in paragraph (2)(a) above.

(9) An employer need not comply with the requirements set out in section 3 and this Part of these Regulations to the extent that it is not practicable for him to do so because—

(a)on section 3 first applying to him (unless, subject to sub-paragraph (b), that section first applied to him on 8th October 2001), he has not had sufficient time to select a scheme which he wishes to designate for the purposes of that section and to complete the designation process, provided that the exemption under this sub-paragraph shall not apply for more than 3 months from the date on which that section first applies,

(b)on employing a fifth employee in the period from 8th July 2001 to 8th October 2001 after a period when he had fewer than 5 employees, he has not had sufficient time to select a scheme which he wishes to designate and to complete the designation process, provided that the exemption under this sub-paragraph shall not apply for more than 3 months from the date on which he employed that fifth employee,

(c)on section 3 applying to him after a period when it did not so apply, he has not had sufficient time to select a scheme which he wishes to designate and to complete the designation process, provided that the exemption under this sub-paragraph shall not apply for more than 3 months from the date on which that section begins to apply after such a period, or

(d)on having withdrawn his designation of a scheme due to reasons beyond his control he has not had sufficient time to select another scheme which he wishes to designate and to complete the designation process, provided that the exemption under this sub-paragraph shall not apply for more than 4 months from the withdrawal of designation.

(10) Where a stakeholder pension scheme commences winding-up, the employer need not comply with the consultation requirements in section 3(2) if, within 4 months of the scheme commencing to wind up, he designates for the purposes of that section the stakeholder pension scheme named in the notice mentioned in regulation 6(2) as the scheme of the trustees' or manager’s choice.

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