UK - Employers are likely to maintain a pension funding level of approximately 8% once personal accounts are introduced in 2012, suggests research unveiled today by the Department for Work and Pensions.

Speaking at the MultiPensions conference in London earlier today, Lord Mackenzie, under secretary to the DWP, told delegates research was being published today which indicated the majority of employers - 86% - would at least maintain contributions and pay more than the statutory 3% in contributions all employers will be required to contribute to employees' pension plans.

"There have been calls that employers paying more than 3% will scale down their contributions but we are confident they will not," said Mackenzie.

He based his argument on a quantitative study of 1,118 employers, released on the DWP website and entitled Employers' attitudes and likely reactions to the workplace pension reforms 2007: Report of a quantitative survey, which suggested: "The majority of employers currently contributing 3% or more …intended to leave their current members in their existing scheme and maintain their current contribution levels for all employees, with some even planning to increase contributions."

More importantly, the quantitative study, conducted by BMRB Social Research on behalf of the Department for Work and Pensions, found employers may level down a fraction, but the sum will drop just one percentage point from the current 9% mean contribution to 8%.

Of those employers with existing schemes, over half also said they would also offer their new employees existing or higher contribution levels.

That said, the tendency towards paying good contributions was swayed somewhat by the size of the employer and the occupation,  suggests the report as the survey found: "In general, large employers, those with occupational pension schemes and GPPS, and those with more than half of their workforce already participating in a pension scheme, were more likely to say they would enrol new employees and non-members into their scheme.

"They were also more likely to say they would offer their existing levels of contributions or higher to these workers," said the report.

The research unveiled is just one of five substantial reports - Reports 546 - 551 - unveiled today by the DWP into the likely take-up and funding of personal accounts and occupational pensions from 2012, when UK pension reforms come into force.

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