More than half of employers are set to review their pension arrangements ahead of the introduction of auto-enrolment and personal accounts in 2012.
Research by the Association of Consulting Actuaries’ (ACA) reveals that 59% of organisations plan to do a review, including 86% of smaller employers with 249 staff or fewer.
Under the government’s pension reforms, over one million employers will be required to enrol all of their employees into a pension scheme that meets certain minimum criteria or sign them up to the new national scheme of personal accounts.
The survey also found that 41% of smaller employers will consider closing their existing pension scheme in favour of offering just personal accounts to all employees. More than half (54%) are likely to revise pension benefits to mitigate the costs if, instead, they auto-enrol all employees into an existing scheme.
ACA chairman, Keith Baron, said: “Whilst we support the government’s ambition to encourage wider pension coverage through auto-enrolment and personal accounts, the survey highlights the complete absence of a coherent plan to support existing quality schemes. The message is clear – good schemes are falling under threat from these well-intentioned reforms. This will mean an increasing number of employees currently in good schemes, and those joining from 2012, are set to receive pensions that fall far short of their needs.”