Tuesday, July 18, 2006

United Kingdom: Employers Remain Strongly Committed to Pensions

According to a major new survey published by the Confederation of British Industry (CBI) and Mercer Human Resource Consulting. UK companies remain committed to providing pensions for staff despite the continuing high costs. Specifically, while 57% of surveyed firms make defined beenfit (DB) pensions available to existing employees but only 16% do so for new staff, "the burgeoning level of contributions companies are making to [DB pensions] is having a significant impact on the money businesses have available to invest for the future and is hitting profits."

Firms with DB schemes continue to experience high levels of pensions costs, with the survey showing that, on average, firms with DB schemes are putting the equivalent of 19.6% of employees’ pay into schemes to fund future benefits and deficits. Nevertheless, this survey of 355 CEOs, chairmen and senior board members (employing 900,000 staff amongst them) reveals that over 86% of employers want to see staff reach retirement with adequate savings and 81% believe a company should play a part in raising understanding of the importance of planning for retirement.

Source: Confederation of British Industry Press Release (June 17, 2006)

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