Employers would have to show the combined value of salary and pension benefits in job advertisements, under a proposed new law.
The Employment (Advertisement of Pay and Pension Rights) Bill suggests “rewarding good employers by helping them to recruit and retain staff”, according to Labour MP John Denham.
“We need to look at ways in which employers can see a clear business case and a clear labour market advantage from a good pension scheme,” the former pensions minister told MPs last week.
Under Denham’s Bill, a job normally advertised at a salary of £24,000, but with a good final salary scheme, would be bumped up to £27,400 – a 14% increase.
Denham said the Bill would not place any additional burden on employers, and guidance would be provided about how to calculate benefits. The Bill is due its second reading in the House of Commons on 3 March 2006.
The proposals are backed by the National Association of Pension Funds. Its chief executive Christine Furnish said there was still a lack of understanding in the UK about how valuable a good pension scheme can be.
“The new Bill would give employers with good pension schemes a deserved advantage in the labour market and enable prospective employees to get a clear picture, in pounds and pence, of the value of the pension on offer,” she said.