16 February 2004
The Chartered Institute of Personnel and Development (CIPD) has argued that protection of company pensions should not only be risk-based, but also shared between employers and employees.
It follows the unveiling of government plans last week to overhaul the private pensions system, which included proposals for a special fund to help people who have lost their retirement savings due to their firm’s insolvency.
Charles Cotton, pensions adviser at the CIPD, said that there is a “strong argument for sharing the burden of pension protection between employers and employees” and that the scheme should be “voluntary”.
“Where the majority of employees vote to protect their pension schemes, payment of the levy should be split equitably between employers and employees,” he argued.
“In all parts of the pensions process, individuals need to recognise their own responsibility to cater for their needs in retirement.”
Mr Cotton also revealed that “companies are not telling employees enough about pensions”, with only 46 per cent keeping workers updated on their pension schemes.
Firms, he said, have a part to play in offering “an attractive, well-funded pension scheme” to attract the best candidates “that will make their business succeed”.
Employees need pension advice to ensure their retirement is financially provided for.