Too many people are “sleepwalking into a job” with no idea about its pension provision and HR professionals are not doing enough to help them, it was claimed today.
In a survey of more than 2,000 UK employees, by the National Association of Pension Funds (NAPF), 94% said that employers should be clearer about pension arrangements when they are recruiting.
Eight in 10 (79%) said that they would be more likely to apply for a job if it offered a good company pension, while 41% believed that a pension was the most important benefit on top of basic salary that an employer can offer – more than twice the proportion specifying bonuses or flexible working.
However, only four in 10 (40%) respondents knew if there was pension provision when they applied for their current job, while 22% only found out if there was a workplace pension after they had already started the job.
The NAPF is calling on employers to be clearer about whether or not there is a workplace pension and what type of pension it is. Where there is a clear employer contribution rate, often a percentage of annual salary as in many defined-contribution schemes, the NAPF believes the employer should be more explicit about the terms.
The association says that it plans to write to the Chartered Institute of Personnel and Development and the Recruitment and Employment Confederation, urging them to raise this issue with their members. Both industry bodies said they are yet to receive any correspondence.
Joanne Segars, NAPF chief executive, said that HR professionals must ensure employers do a a lot more than simply “mention the pension”.
“It is astonishing that so many people are sleepwalking into a job without knowing if there’s a pension,” she said. “The UK faces a growing retirement saving crisis. Treating the workplace pension as an afterthought has serious implications. A good pension is a vital part of any reward package. It’s not ‘nice to have’ or a fringe benefit, like a gym. In some cases it can be worth up to one-third of annual salary. People need to think about the pension right at the start of any job search.”
The NAPF ran its own separate study of 200 online and newspaper job adverts. Only 12% mentioned pension provision at all, compared to 71% which specified salary. The study found that only two job ads out of the 200 specified the pension contribution rate.
The research was released a day ahead of the publication of Lord Hutton’s interim report into public sector pensions. See Personnel Today tomorrow for full coverage.