Staff ‘don’t appreciate’ final salary pension schemes

A
survey of UK employers reveals that 21 per cent of those offering a final
salary pension scheme plan to close it.

The
survey of 252 employers by Employee Benefits magazine shows that nearly
three-quarters of employers with such pension schemes think their staff don’t
appreciate the cost and effort that goes into running the scheme and about half
feel their staff do not understand their pension.

The
magazine believes this is partly because pensions are complex and and partly
because employers aren’t communicating with their staff.

Nearly
60 per cent of organisations only communicate with staff about pensions once a
year and one in 10 only discuss pensions when an employee is recruited and when
they are about to retire.

Debi
O’Donovan, editor of Employee Benefits said final salary (also known as defined
benefit) pension schemes are proving expensive as a result of the downturn in
the economy.

She
added: “Both the Government and employers, especially those which offer defined
benefit type schemes, need to make more of an effort to educate employees about
the need to either make higher contributions during their working life, or to
be prepared to work long past the age of 65.”

By
Lisa Bratby

 

 

 

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