Workplace pensions in the UK
present a sorry picture of decline, reveals 2009 a data study
published by the Office for National Statistics (ONO). Of
particular concern is that in recent years defined contribution
(DC) pension provision has joined the long-term decline in defined
benefit (DB) pension provision.
Overall, the ONS study shows that
35% of private sector employees were in a workplace pension scheme
at the end of 2009, down from 45% in 1999.
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Of the total, 12% were in a DB
scheme at the end of 2009, down from 14% a year earlier and 30% in
1999. Notably, ONS data reflects that 80% of public sector
employees were active members of DB schemes in 2009.
On the DC scheme front, after a
period of steady growth which saw the proportion of employees in DC
schemes rise from 11.9% in 1999 to 24.9% in 2006, the proportion in
all the subsequent years fell to reach 23.1% at the end of
2009.
Mark Duke, senior consultant at
consultancy Towers Watson, said: “This has been a decade of decline
for private sector pension provision. The government intends to
force employers to put their staff into pension schemes
automatically, but has twice delayed these reforms because it loses
tax revenue when people save for retirement.”
Duke was referring to the Pensions
Act of 2008 which requires employers to enrol staff into a pension
scheme with a minimum level of employer contributions. The
government, noted Towers Watson, now proposes to extend this duty
to all employers over four years – between October 2012 and
September 2016 – having originally said this process would take
between 12 and 18 months. Minimum default contribution rates will
not be fully phased in before October 2017.
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By GlobalDataThe demise of DB schemes and the
impact of the recession on the UK’s economy has produced a
significant change in employee attitudes towards financial
planning, reveals a Towers Watson study. A survey conducted between
November 2009 and January 2010, by the consultancy that employees
are recognising they must assume greater responsibility for their
own retirement savings.
Towers Watson found 68% of
employees believe they are personally responsible for providing for
their own retirement income needs, with18% saying the
responsibility lies with their employer and 15% saying it rests
with the government.
Looking ahead over the next five
years, 75% saying it will be primarily their personal
responsibility with those suggesting their employer is responsible
reduced to 15% and those citing the government to 10%.
Some 37% said they are comfortable with the responsibility, 28%
are not and 34% are uncertain.
