Private pension providers will have their work cut out convincing employers to maintain their schemes when personal accounts go live in 2012, a pensions expert has admitted.
Emma Douglas, head of defined contribution sales at investment services firm Blackrock, told Personnel Today there was a danger that firms would close their pension schemes from that date.
Under the terms of the Pensions Bill companies will have to contribute 3% of employees’ wages from 2012 into a personal account – unless the individual opts out. Critics fear that firms currently paying higher amounts into private schemes will scrap them in favour of personal accounts.
“There is a danger of levelling down,” Douglas admitted. “But that would be a shame.
“We need to have lots of engagement with employers so that they understand that good workplace pensions will still have a great impact on recruitment and retention.”
Douglas said she was confident that many employers would understand the benefits of keeping defined contribution schemes open.