Businesses skimp on pension provision
Jan 04 2011
Two-thirds of businesses in the UK do not offer a pension scheme to employees
Two-thirds of businesses in the UK do not offer a pension scheme to employees, according to research from the Association of Consulting Actuaries (ACA).
The survey of 404 companies with 250 or fewer employees reports that defined contribution pension schemes attract combined employer and employee contributions of less than 8 per cent of earnings.
Defined benefit schemes, where the benefits payable to members are determined by the scheme rules, are on average receiving combined employer and employee contributions of 24 per cent of earnings.
However, nine out of 10 of these schemes are closed to new entrants and 41 per cent are closed to future accrual by existing members.
Under the government’s pension reforms, all small businesses will be required to auto-enrol their employees into a workplace pension scheme between 2014 and 2016.
By October 2017, total ontributions must equate to 8 per cent of an employee’s earnings.
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