If your business operates a stakeholder pension scheme or deducts personal pension contributions from earnings then it is your responsibility as employer to ensure that there is a ‘record of payments due’ setting out what amounts are payable and when they are payable.

This record also needs to be produced if you pay employer contributions to these schemes – these contributions need to be shown separately. It is the employer’s responsibility to ensure that this schedule is sent to the provider of the scheme by the first due date shown.

Employee contributions must be paid over by the due date (the 19th day following the end of the month in which the deduction was made from the employee’s earnings). The due date for employer contributions is as agreed with the provider but will usually be the same as for employee contributions.

It is the employer’s responsibility to ensure that the ‘record of payments due’ is amended to accommodate any changes and that this amended record is sent to the provider before the amended payment is due.
Penalties await the unwary
Since 6 April 2001 the Occupational Pensions Regulatory Authority (OPRA) has had the power to penalise employers who have not put in place a ‘record of payments due’ and who have not paid over pension contributions in accordance with these records. OPRA views the late payment of pension contributions very seriously and can impose penalties of up to £50,000!

The providers can tell OPRA if ‘records of payments due’ are not received and indeed have a legal duty to inform OPRA if any contributions are not received by the due date.

Barnes Roffe Topical Tips

• Your provider can prepare the ‘record of payments due’ for you, but it is your responsibility to ensure that it is in place.
• You should ensure that the provider is notified of any changes so that a revised record is produced within the required timescale. OPRA recommends that monthly records are produced.
• Make sure that contributions are paid over by the due date. The 19th of the month following deduction from earnings is the date to remember.
• If you haven’t got a stakeholder pension scheme in place, but should have; you are breaking the law and risking a £50,000 fine. Please ask for a copy of Topical Tips No.8 which covers your obligations in detail.

This bulletin is intended to remind employers of their obligations under the rules regarding stakeholder pensions. Whilst Barnes Roffe is authorised to carry on investment business by the Financial Services Authority, nothing in this bulletin should be construed as investment advice.