Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Auto-enrolmentLatest NewsPay & benefitsPensions

Pension salary sacrifice option ignored by employers

by John Charlton 9 Oct 2009
by John Charlton 9 Oct 2009

Many employers are not taking advantage of salary sacrifice in the defined contribution (DC) pension schemes they offer – despite the looming prospect of auto-enrolment.

Research by consultancy Mercer among 345 UK companies that offer DC schemes, found 40% have implemented salary sacrifice, up from 13% in 2007.

Mercer principal and DC expert Steve Charlton said: “Despite the large increase, most companies are still not taking advantage of what could be a significant cost saving for their DC plans.” He told Personnel Today that salary sacrifice could save employers 22% of their DC contribution costs.

He added that payroll systems were not an issue as “most can handle salary sacrifice”. But he said employers who may auto-enrol employees who are paid at or near the minimum wage should be very careful about using salary sacrifice for such staff as it could leave them worse off. “There are pitfalls that employers need to investigate.”

The research also found that 50% of respondents believe that the introduction of Personal Accounts (PAs) in 2012 will lead to increased costs. Yet 23% of those polled had yet to consider the impact of PAs on their business.

Charlton commented: “The introduction of PAs will have a considerable impact on company remuneration budgets, and the only way to avoid a shock is to start thinking about how to measure and mitigate the risk now.”

The research also revealed that 95% of respondents offer voluntary DC plan membership to employees and that 53% had set a target take-up rate of more than 90%. But only 29% of them have achieved this.

Forty-one per cent of the plans surveyed have a take-up rate of less than 60%.

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

Receive the Personnel Today Direct e-newsletter every Wednesday

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

Another Mercer poll, of employers in 33 countries, which included 452 European and UK respondents and 621 US respondents, found the three most common reasons for UK respondents establishing a DC plan were: to reduce volatility in the cost of providing a retirement plan; to encourage employee responsibility; and to reduce the overall cost of providing a retirement plan.

For US respondents, it was: to remain competitive in terms of attracting and retaining employees; to encourage employee responsibility; and to provide adequate benefits on retirement.

John Charlton

previous post
Conservative Party Conference: Policy round-up
next post
Friday Podcast: Conservative Party Conference round-up; personal accounts

You may also like

Government publishes ‘roadmap’ for Employment Rights Bill

1 Jul 2025

Ethnicity and disability pay gaps: Ready to report?...

1 Jul 2025

Government moves swiftly on immigration reform

1 Jul 2025

One in eight senior NHS managers from black...

1 Jul 2025

Government launches ‘landmark’ review of parental leave

1 Jul 2025

Clarks cuts 1,200 jobs after ‘year of transition’

1 Jul 2025

How HR can support families with adoption

1 Jul 2025

Co-op equal pay claims move onto next stage

30 Jun 2025

‘Be direct’ to avoid escalating conflict, advises Acas

30 Jun 2025

Reforming paternity leave could benefit UK by £13bn...

30 Jun 2025

  • Empowering working parents and productivity during the summer holidays SPONSORED | Businesses play a...Read more
  • AI is here. Your workforce should be ready. SPONSORED | From content creation...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+