Contributions
The employer contributes a defined percentage of earnings, which may be fixed, age-related or
linked to what the employee pays. The 2003 survey by the National Association of Pension
Funds found that the level of employer contribution averages 6 per cent. The employee also
contributes a fixed percentage of salary
Stakeholderpension
A stakeholder pension is a government sponsored scheme, primarily designed for lower paid
employees. Employers who do not provide a suitable pension scheme for their employees are
required by law to offer access to a stakeholder scheme. A stakeholder pension is a
defined contribution
arrangement that satisfi es certain conditions, designed to ensure that it provides
good value for money and that members’ interests are protected. The most important provision
is that contributions from members should be flexible – they must be free to pay whatever
contributions they wish, when they wish.
Communicating pensions