EXCLUSIVE: April 2016’s reductions to the annual and lifetime pensions allowances impacted between 1% and 5% of staff in just under half (45%) of employer respondents’ organisations, according to research by Employee Benefits and Close Brothers.
The Employee Benefits/Close Brothers Pensions research 2016, which surveyed 250 employer respondents, also found that a further 12% said between 6-10% of staff were affected, while 10% of respondents said that none of their employees were impacted by the change.
This contrasts somewhat to the results of last year’s research, which found that 14% of respondents felt a significant number of staff would be affected by the allowance reductions.
From 6 April this year, the annual allowance for those earning more than £150,000 a year was tapered down to a minimum of £10,000, while the lifetime allowance for pension contributions was reduced from £1.25 million to £1 million.
While some organisations have looked to alternative forms of remuneration to compensate affected staff in lieu of pension contributions going forward, a higher percentage of respondents than last year have decided not to do so. Last year, 27% of respondents indicated that they were not planning to introduce any alternative form of remuneration for affected staff. This year, 38% of respondents said that, after the event, they have not done so.
Where respondents do offer alternative forms of reward to affected staff, cash remains the most popular option.
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