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11 Feb 2013

Two-Fifths Of Smaller Firms Without Pension Schemes Support Larger Schemes

Some 42% of smaller employers, that do not currently have a pension scheme, believe in the value of fewer, bigger schemes, where members and employers might share investment, inflation or longevity risks, research by the Association of Consulting Actuaries showed earlier this month.

In addition, some 39% of them support the government´s encouragement of the development of such schemes, the survey unveiled.

By contrast, just 20% of firms with pension schemes in place at present think that the government should support consolidation between pension schemes, while 66% are against the government´s push to encourage firms with small defined contribution schemes to merge them into multi-employer schemes.

Considering the Reinvigorating workplace pensions paper, released by the Department for Work and Pensions last November, employers listed “increasing the amount people received as an outcome from their savings” as the top priority. This was followed by boosting transparency and trust, while increasing the amount saved by employees into pension schemes was the fourth ranked priority.

One third of firms back “automatic escalation schemes” in which the pension contributions of members rise at a future date, often in line with salary hikes, and 22% would consider the addition of such a feature to their scheme, according to the research.

The survey, which is called “Challenges ahead for the new medicine” and includes responses from 344 smaller firms, represents the second part of the Association of Consulting Actuaries´ biennial survey of pension trends among smaller employers. The first part was released in October.

Copyright © M2 Bespoke 2013

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