Pensions Act 2004

Pensions Act 2004

2004 CHAPTER 35

Commentary on Sections

Part 5 – Occupational and Personal Pension Schemes: Miscellaneous Provisions

Stakeholder pensions

Section 285: Meaning of “stakeholder pension scheme”

1143. This section makes two clarifying amendments to section 1 of the Welfare Reform and Pensions Act 1999 (the WRAP Act) which outlines the meaning of ‘stakeholder pension scheme’. The section amends section 1(5) of the WRAP Act to clarify that the limitation on the application of stakeholder pension funds of scheme members to defray administrative expenses (the “charge cap”) applies not only to contributions paid by or on behalf of members, but also to contributions paid by an employer on his own account to the designated scheme of one of his employees, and contributions made by another third party such as a relative. The section therefore amends reference to member contributions to cover contributions made ‘by, or on behalf or in respect of’. This section also inserts section 1(10) into the WRAP Act, to clarify that stakeholder pension schemes must be contracted-out schemes to satisfy a qualifying condition for registration by the Regulator to the effect that they must accept transfer payments (including contracted-out rights) in respect of members’ rights in other private pension schemes.