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17/06/2005
Pensions reforms ‘could affect jobs’
One in five firms would cut jobs if they were forced to pay into pensions for their employees, a survey by the British Chambers of Commerce (BCC) has indicated.
The survey of over 800 businesses also found that more than a third of employers would be forced to meet the cost of compulsory contributions by freezing salary increases, while just under third would have to pass the cost onto customers by raising prices.
BCC Director General David Frost said that forcing employers to pay into pension schemes for their staff would increase the cost of employing someone and force some firms to reduce their workforce in order to meet the cost. Mr Frost said: “At a time when our companies are facing fierce competition from countries such as India and China, compulsory pension contributions are the last thing that UK employers need.”
According to the BCC survey, many firms are already finding pension provision to be cost prohibitive. 57% of those firms surveyed that did not offer a pension contribution for their staff said the major reason was because they could not afford the cost. Three-quarters of these companies employed less than 50 people. One third of firms that did not offer a contribution said that it was because employees would prefer other benefits, such as higher salaries.
The BCC said that the government needed to do more to encourage and enable individuals to take greater responsibility towards saving towards their retirement. The survey found that 55% of schemes that offered an employer contribution of between 5% and 10% had failed to attract more than half of the workforce as members.
Mr Frost said: “The failure of individuals to save is undoubtedly due to a range of factors. However, we now need to see real measures to encourage more people to pay into pensions. This means better government-led information for employees about the benefits of pension saving, greater use of automatic enrolment in company pension schemes and a simpler state pension system that complements individual saving rather than discourages it.”
(KMcA)
The survey of over 800 businesses also found that more than a third of employers would be forced to meet the cost of compulsory contributions by freezing salary increases, while just under third would have to pass the cost onto customers by raising prices.
BCC Director General David Frost said that forcing employers to pay into pension schemes for their staff would increase the cost of employing someone and force some firms to reduce their workforce in order to meet the cost. Mr Frost said: “At a time when our companies are facing fierce competition from countries such as India and China, compulsory pension contributions are the last thing that UK employers need.”
According to the BCC survey, many firms are already finding pension provision to be cost prohibitive. 57% of those firms surveyed that did not offer a pension contribution for their staff said the major reason was because they could not afford the cost. Three-quarters of these companies employed less than 50 people. One third of firms that did not offer a contribution said that it was because employees would prefer other benefits, such as higher salaries.
The BCC said that the government needed to do more to encourage and enable individuals to take greater responsibility towards saving towards their retirement. The survey found that 55% of schemes that offered an employer contribution of between 5% and 10% had failed to attract more than half of the workforce as members.
Mr Frost said: “The failure of individuals to save is undoubtedly due to a range of factors. However, we now need to see real measures to encourage more people to pay into pensions. This means better government-led information for employees about the benefits of pension saving, greater use of automatic enrolment in company pension schemes and a simpler state pension system that complements individual saving rather than discourages it.”
(KMcA)
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Northern Ireland WeatherToday:A few fog patches at first, soon clearing to leave a dry day with some patchy cloud and good sunny spells. Light and variable winds. Feeling mild in sunny spells. Maximum temperature 14 °C.Tonight:Dry and quite chilly overnight under prolonged clear spells and light winds. This will allow a few fog patches to develop in places. Minimum temperature 2 °C.
