Employers
should be forced to contribute to pension schemes, says the TUC.
Concerned
that a widespread move from final pension schemes will see employees receive a
much smaller pension upon retirement, the TUC is calling on the Government to
make changes.
A
TUC analysis of Government figures shows there are at least 1.8m fewer
employees in final pension schemes than a decade ago.
The
TUC estimates that 200,000 of these employees are likely to have transferred to
personal pension style money purchase schemes, leaving 1.6m without any form of
occupational pension.
TUC
general secretary John Monks said there may be even more people without an
occupational pension because many firms have closed schemes recently, and
without a statutory obligation on employers to contribute, the decline will
continue.
“The
recent closure of the Iceland and Ernst and Young final salary pension schemes
rightly hit the headlines,” he said.
“But
these figures show that the closures were only the tip of a very large pensions
iceberg. Over the past decade employers and the state have been shifting
responsibility for pensions provision on to individual employees, many of whom
have no idea how poor they will be when they retire or simply do not have the
spare cash to make up savings needed to build up a sufficient pensions pot of
their own. That is why employers must be made to contribute to pensions
schemes.”
The
TUC also called for a simplification of the pensions laws, and an urgent review
of the FRS17 accountancy standard which is cited as one of the reasons
employers are abandoning final salary schemes.
They
also called for a national consumer education programme about pensions.
