Pension arrangements are to be reviewed by 59 per cent of employers ahead of the introduction of auto-enrolment and personal accounts, the Association of Consulting Actuaries (ACA) has claimed.
The survey found that 41 per cent of smaller companies will consider closing their existing pension scheme in favour of offering Personal Accounts, which are due to be rolled out in 2012.
But the ACA claims that such drastic changes could do more harm than good, particularly as most UK pension schemes are run by smaller companies, and 90 per cent have less than 100 members.
The survey also found that just one third of employers have budgeted for the increased costs arising from the pension reforms, which are likely to come in the shape of auto-enrolment into existing schemes, meaning higher membership and higher employer costs.
So, while the Government attempts to simplify pensions, the ACA survey suggests that employers are dissatisfied with the outcome. Commenting, ACA chairman Keith Barton said:
"Whilst we support the Government's ambition to encourage wider pension coverage through auto-enrolment and personal accounts, the survey highlights the complete absence of a coherent plan to support existing quality schemes.
"The message is clear – good schemes are falling under threat from these well intentioned reforms."
As a result, the ACA is calling for legislative changes to allow new 'middle way' pension designs aimed at protecting existing quality pensions, in addition to suggesting a delay for the roll out of the pension reforms.
Mr Barton adds: "The reforms are much more likely to achieve their desired results if they are introduced at a time of rising incomes and/or reducing taxes on employers and employees."
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