Employer contributions are vital in encouraging people to join pension schemes, according to research published ahead of the final report of the Turner Commission tomorrow. In a survey by consultants Watson Wyatt of more than 1,500 people, 62% said employer contributions were the most important reason for them to join a pension scheme. The second most important reason given was the perception that a work-based pension scheme was the best way to save for retirement (26%). Other reasons given were: tax incentives (7%); because scheme available is a good one (3%); and the encouragement of friends and family (2%). “The role of company contributions to pension schemes is vital and accounts for why so many stakeholder pensions without employer contributions continue to lie dormant,” said Gary Smith, a senior consultant at Watson Wyatt. “The proposals that the government eventually puts forward following the Turner Report clearly need to encourage and incentivise employers not only to set up pension schemes but to contribute to them. “Any approach the government takes must acknowledge and encourage the crucial role that companies already have in providing for their employees’ retirement income,” he said. The Pensions Commission, chaired by Lord Turner, will deliver its final report tomorrow when it will address responses to its main recommendations last year.
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