Manufacturers seek level playing field on pensions

The number of manufacturers that offer occupational pensions which believe that all companies should be required to make compulsory pension contributions over and above National Insurance (NI) levels has increased sharply in the past six years.

EEF, the manufacturers’ organisation and Aon Consulting have conducted regular research into pension provision since 1998.

This year, the survey of more than 520 firms shows that 68 per cent support some element of compulory employer-paid pension contribution, compared to 50 per cent when asked in 1998.

This support has decreased slightly over the period among manufacturers that have 500 or more employees, but has increased among manufacturers with a smaller workforce, when measured against those with less than 50 employees and those with between 50 and 500.

The fact that these small and medium-sized manufacturers often face domestic competitive pressures from employers with no occupational pension arrangements explains why an increasing number of them now seem to be seeking more of a “level playing field” for employer pension provision, the survey said.

In addition, the level of support for compulsory employer provision among manufacturers that already have occupational pension arrangements for all employees has only increased slightly, from 74 per cent of all respondents in 1998 to 77 per cent in 2004.

David Yeandle, deputy director of employment policy at EEF, said: “It should not be a surprise that a growing number of manufacturers with occupational pension schemes feel that, on grounds of competitiveness, there should be more of a level playing field for employer pension provision.

“However, this is a complex area and further compulsion could not be contemplated by manufacturers unless they see it as part of a satisfactory long-term solution to future pensions policy.”

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