Group Stakeholder Pensions Plan - Overview
The AXA Group Stakeholder Pension is a collection of Stakeholder Pension Plans arranged by an employer for their employees. It is designed on a group basis so that it is easier to administer. Each individual stakeholder is an investment plan designed to help the member invest for their retirement. Stakeholder pensions have to meet certain standards and obey certain rules. This plan meets all the stakeholder requirements.
A Group Stakeholder Plan is set up by an employer but each individual stakeholder belongs to the employee. This gives the employee control but also means the risks affect the employee directly. Amongst other things, the employee’s pension income will depend upon how much has been paid in, how their investments perform and annuity rates at the time they take their benefits.
The money will be invested in funds that invest in different investments such as stock markets and property. The employee can choose their own investment funds from a varied range. If they don't want to choose specific funds AXA will invest their money in its Lifestyle Retirement Funds - funds that are actively tailored to the employee's retirement date.
Please remember that the value of the employee's investments can fall as well as rise and is not guaranteed. This means that an employee’s fund may be less than the amount invested.
- Facts about Group Stakeholder
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Fact |
Description |
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Contributions |
The employee may contribute, and will normally receive tax relief, on an amount not exceeding 100% of their UK taxable earnings (or £3600 if their earnings are less than this). The minimum payment is £20 for both regular and one-off contributions. |
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Employer contributions |
Optional. |
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Benefits |
When the employee retires, the plan will provide them with a pension. The employee can choose, at retirement, whether to have a pension, or a tax free cash sum of up to 25% of their fund and a reduced pension (other options may be available. Their financial adviser can provide information). Different rules may apply to benefits in respect to contracting out of state pension benefits. |
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When can an employee start contributing? |
The employee must be at least 18 years of age to take out this plan, even though a Stakeholder Pension can be established for the benefit of someone under the age of 18. |
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Pension age |
Any age from 50 to 75. But the lower age is changing to 55 on 6 April 2010. |
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Tax |
Tax relief on contributions up to the greater of 100% of the employee's relevant UK earnings which are chargeable to income tax and £3600, less contributions paid into any other pension arrangement in that tax year. However, the employee may become liable to a tax charge if contributions paid to all their money purchase schemes plus the increase in the value of their pension benefits in defined benefit schemes over a tax year exceeds the annual allowance for that tax year. The annual allowance is £245,000 for the 2009/10 tax year increasing to £255,000 for the following 6 tax years. When the employee takes their benefits, 25% of their fund can usually be taken as a tax free cash sum. If the value of the benefits being taken is greater than the employee’s remaining lifetime allowance the excess may be subject to a tax charge. The standard lifetime allowance is £1,750,000 for the 2009/10 tax year increasing to £1,800,000 for the next 6 tax years. Pensions are currently taxed through PAYE. Tax paid on the pension income will depend on the employee's income tax rate at the time the pension is paid.
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Charges |
The charges we make cover the cost of setting up the plan and any advice provided (unless the employer is paying a fee to their adviser). They also include the cost of administering the plan and professionally investing the money. We take a yearly management charge for the retirement fund and the standard amount is 1% of the value of the funds held with us. Some funds may incur additional costs and details of these may be found in the Pension Funds Guide. The amount of the charge is restricted by legislation and will not exceed 1% of the value of the funds held with us.
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Funds |
A wide range of funds managed by both AXA and other investment fund managers. The 'Where Do You Want To Be' booklet is designed to explain to retail customers how pension fund investments work. The list of funds AXA offers to Group Pension customers is shown in the 'Our Pension Funds' publication. This document also details any additional charges for (some) funds. |
