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.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Phone

This field is for validation purposes and should be left unchanged.

Δ

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

By
Jessica Devonport