Private pensions may close once personal pensions start, expert warns

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.

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