Employers uncertain in light of pensions higher-rate tax hike

The majority (64%) of UK organisations have yet to decide if they would change their pension scheme in light of the pensions tax changes for those earning more than £150,000 a year.

A snapshot poll by Mercer of 350 HR and pension managers and compensation and benefit specialists also found that 60% of respondents thought that the current government’s proposals are better than the previous government’s approach.

In addition, 50% believed that more of their employees would be affected by the proposals compared to 15% who thought that fewer employees would be affected.

In terms of communicating pension changes, 40% of respondents planned to communicate with employees in November or December 2010, with 15% planning communication throughout September or October 2010.

Roger Breeden, principal at Mercer, said: “Given the timeframe on this issue, companies are potentially required to have taken action on this very complicated issue by April 2011, less than six months away.

“While the detail has yet to be ironed out, companies should be preparing. Turnaround time following publication of the government’s intentions will be very, very tight.

“Inaction is to be partially expected as the industry awaits direction from the government but many companies are anticipating changes and using the opportunity to make wider changes to all elements of their pension schemes. These include introducing different benefit or contribution levels.”

Read more articles on the pensions tax hike for the highly paid.