Employees are increasingly turning their backs on company pension schemes.
New research shows companies remain seriously committed to pensions, but are
genuinely concerned that poor employee take-up "threatens many with
poverty in old age".
A survey of 233 businesses by the CBI and Mercer Human Resource Consulting
found that just 38 per cent of eligible employees joined a defined contribution
scheme when it was offered to them.
Ninety-six per cent of the employers surveyed provided occupational schemes
or contributed to individuals’ private pensions. Eighty per cent said they want
to help employees plan for retirement, and 73 per cent firmly believe that
offering a pension scheme helps to recruit and retain staff.
John Cridland, CBI deputy director-general, said: "The pensions issue
has received enormous public attention. So it’s deeply worrying that despite
the efforts of business, so many employees are failing to see beyond tomorrow,
and are rejecting employers’ attempts to help secure their futures."
However, only a third of companies offered either generic information or
individual advice with no discernible difference between the two approaches.
The Chartered Institute of Personnel and Development (CIPD) said employers
who do not keep staff updated on pension packages risk demotivating their
workforces and losing out in the battle to attract skilled staff.
Charles Cotton, CIPD adviser on reward and employment conditions, said:
"If you are not telling staff about the benefits on offer and they are not
taking up these benefits, you might as well not have them in the first
CIPD research published last month revealed that while 88 per cent of
employers tell their staff about pensions during the recruitment and induction
process, only 46 per cent continue to keep them informed on an ongoing basis.
The CBI survey also predicted that defined contribution schemes would
continue to dominate pension provision in 10 years time.
By Mike Berry