Pensions withdrawal trend escalates

An
increasing number of employers believe their staff prefer higher pay over
pension contributions.

The
Employee Benefits/Scottish Widows Pensions Strategy Research 2002 found that a
third of employers now believe their workforces would appreciate more pay
instead of employer contributions to their pension.

In
previous years’ research only 10 per cent of respondents believed this.

The
increasing number of headlines generated by pension scheme closures has also
eroded the belief that employers cannot withdraw a pension as a staff benefit.

Only
16 per cent of employers now believe they shouldn’t withdraw a pension scheme
once they start offering one – compared to about one in three employers in
similar research just six months ago.

The
trend to close final salary defined benefit schemes is set to continue.
Twenty-six per cent of those offering a final salary defined benefit (DB)
scheme plan to close it in the next 12 months.

This
will mean that in the future DB schemes are only expected to make up 40 per
cent of all schemes.

Debi
O’Donovan, editor of Employee Benefits said: “The days of a guaranteed pension
are over. This research shows a dramatic sea change in just six months since
out last survey.

"The
implications for UK employees is that we are going to go the US route where
each person will be responsible for their own investments for the future. The
days of the nanny employer are nearly over.”

By Ben Willmott

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