23/09/2009 - New pension scheme to be introduced
Around 41% of small firms with less than 250 staff are planning to replace their existing pension scheme with the Government's new personal accounts to be introduced in 2012, a study shows.
According to a survey by the Association of Consulting Actuaries (ACA), a further 54% of smaller employers also said they were likely to revise the pension benefits they offered to offset the increased costs if they decided to enrol all workers into their existing scheme.
Under the new initiative, individuals will have to contribute at least 4% of their salary towards their pension, with employers paying in 3% and the Government adding 1%.
However, only one in three of all companies in the UK have so far budgeted for the increased costs of the new changes, falling to 16% among smaller firms.
After the new scheme is introduced, all workers will be automatically enrolled into it, although they will retain the right to opt out.
With many pension schemes currently having less than a 60% take up rate among staff, and many small firms not currently offering a pension at all, the changes are likely to make an impact on the cost of pension provision for companies, the ACA warned.
Copyright © Press Association 2009
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