[A-List] UK legitimation crisis: pensions

["Michael Keaney" <michael.keaney@xxxxxx>]

Employers put less into pension schemes

Phillip Inman
Wednesday November 13, 2002
The Guardian

Employers are paying less into money purchase pension schemes than two years
ago, fuelling demands for companies to pay a minimum contribution to
occupational schemes.

The Liberal Democrats and TUC were joined yesterday by the charity Help the
Aged in calling for the government's long-awaited pensions green paper to
include compulsory employer contributions among its recommendations. Lib Dem
pensions spokesman Steve Webb MP said the findings provided more evidence
that employers must be forced to support staff pensions.

"Putting a floor under pension contributions should be part of employing
someone," he said.

Brendan Barber, the new TUC general secretary, said: "This is further
evidence that employers are joining with government to shift responsibility
to employees to make their own pensions provision. Yet employees cannot
afford to make the saving they need to ensure a reasonable income in
retirement."

Help the Aged published a pensions manifesto ahead of the green paper in
which it called for a pensions watchdog to police minimum standards.

The figures from actuaries Mercer Human Resource Consulting show employers
have cut contribution levels from 6.3% to 6% of staff salaries since 2000.
The cuts are in ad dition to a stock market decline of more than 20%.

Average employee contributions were 3.3%, giving a total contribution of
9.3% of members' annual salary. Most final salary pension schemes need
funding levels nearer 18% of salary to provide a pension worth two thirds of
final salary after 40 years' service.

Tony Pugh, the firm's European partner, said that his survey of 450 firms
revealed what many people had feared.