Cash alternatives to pensions move up the agenda

A
quarter of all companies (24 per cent) are or would consider introducing a cash
alternative to pension arrangements as an option for employees, according to
new research.

The
Towers Perrin survey of 186 FTSE350 companies also shows 14 per cent of
organisations would consider a cash alternative to a pension scheme as a
company-wide policy.

Between
2002 and 2004 there has been a 46 per cent increase in the number of companies
that do not now offer defined-benefit plans (final-salary schemes) to existing
employees.

Peter
Routledge, partner at Towers Perrin, said: "The only way to really tackle
pension liabilities would be to start to change existing employees’ benefits.

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“However,
this change needs to be implemented extremely sensitively, perhaps involving
some element of choice and control for employees,” he said.

By
Jessica Devonport