UK – Work and Pensions Secretary, Andrew Smith, has invited business leaders to form a pensions task force, whereby employers, Government and individuals work together to encourage greater savings.
His proposal to involve key organisations in developing the future of pensions should play a major part in the reforms proposed in the government’s green paper on pensions to be out in the next few months.
Smith urges companies with occupational schemes to speak up about the good deals they offer their employees.
“We need to share good practice, let people know where companies are doing good things, where employers are encouraging their staff to take up pensions,” says Smith.
Smith highlights the increasing trend towards a closure of schemes, saying: “too often this has been a cover for cutting contributions – and this fundamentally undermines the pensions partnership.
“We should all be concerned when schemes close and contributions are cut with little or no dialogue with employees themselves. This secrecy undermines confidence in the pension promise and ultimately damages loyalty to the company.”
In a recent study conducted by Watson Wyatt, it was revealed that 56% of UK companies undertaking major reviews of their final salary pension schemes in the past five years have opted to close their scheme to new entrants while only a third have decided to make no significant change.