36% of pension schemes in jeopardy
Workplace pension schemes are in jeopardy from introduction of government-sponsored personal accounts
The introduction of government-sponsored personal accounts in a few years’
time could lead to many employers closing their workplace pension schemes,
according to the Association of Consulting
Actuaries (ACA).
A recent ACA survey of employers and their pension arrangements, revealed 36%
of companies with fewer than 250 staff said they might close their existing
schemes, choosing instead to pay into the new system.
These findings would add weight to the argument that personal accounts could
lead to a levelling down of workplace pension provision, causing some companies
to reduce the amount they pay into their employees’ plans, The
Independent reports.
Tim Jones, chief executive of the
Personal Accounts
Delivery Authority, told the BBC the percentage of salary employees would be
expected to pay in the first year after the accounts were introduced would be
just 1%, rather than 4%, in the hope that, by allowing employees to start off
with a low contribution, fewer people would be tempted to opt out of personal
accounts.
Further reading:
Pension schemes face rules hit