A proven way to get staff involved in occupational pensions from the start is through automatic entry, whereby staff are given the option to opt out rather than opt in.
This stops short of compulsion, which the CBI is railing against but which the TUC advocates, calling for a national debate on introducing further compulsion into the UK’s pensions system.
Research from Watson Wyatt found a 95 per cent take-up rate when automatic entry is offered, compared to a 59 per cent take-up rate when it was made optional.
Cotton said companies can use apathy about pensions to their advantage: “Give staff [an unwieldy amount of] pensions documents that give them the option of getting out,” he said.
Cheseldine said companies should not only make entry automatic, but also make increases in staff contributions automatic when they got paid more using the same system.
A solution mooted by the Turner Commission report is making people work longer and ending a culture of early retirement. This will need a change in attitude for those companies who believe getting rid of people at 50 clears out dead wood in an organisation, according to David Coats, associate director for policy at The Work Foundation.
“Not only is this wrong, in most cases it is a policy at odds with the thrust of the Pensions Commission analysis,” he said. “A policy of keeping people working won’t work if employers insist on sticking to a sell-by date for their employees.”
Encouraging people to work longer is not just an age issue, said David Yeandle, deputy director of employment policy at manufacturers’ organisation EEF.
Yeandle said employers had to come up with imaginative ways of getting people who are signed off with long-term sickness back to work. “Try bringing them back part time or on lighter duties and keep in touch while they are off.”