WA76

'Last chance saloon' for voluntary pensions

Employers must do more to help sustain the voluntary occupational pension system or face a system of compulsory pension contributions, according to the Employer Task Force on Pensions (ETF).

Chairman of the Task Force, Sir Peter Davis, said, 'We at the Employer Task Force want the current voluntary approach to work and believe employers have an opportunity to build on and improve the current framework in a way that makes sense for business'.

However, he warned that we are now in a 'last chance saloon' for voluntarism, and that unless the current decline in adequate employer-led pension provision can be reversed the Government may be forced to look at 'more drastic solutions'.

The report recommends a number of measures, including the introduction of a targeted incentive for smaller businesses.

Other recommendations include:

• Employers must recognise their responsibility to help fund employee pensions
• Employers must aim to achieve combined contributions of 10-15%, with employers contributing two-thirds of this sum
• Employees must take responsibility for their pension provision, and contribute to their schemes
• Employees must recognise employer pension support as a significant benefit
• Unions must promote the importance of saving for retirement among their members, and encourage them to join schemes and make contributions
• The Government must provide a stable, long-term framework for UK pensions.

The full report, and a Good Practice Guide, are available on the ETF website (http://www.employertaskforce.org.uk).

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