Companies not recruiting due to new pensions legislation
Posted on March 25, 2013
Employers use harsh methods to reduce pension benefits
In a nationwide survey conducted by UK HR services company, The Curve Group, 50% of companies who responded stated that the financial burden of introducing a new pension in light of the changes in legislation is restricting their ability to recruit new employees.
Equally surprising was some of the harsher methods employers have been using in the last 12 months to reduce pension benefits, such as dismissing and then re-engaging the entire workforce on a new contract with a 6% contribution versus the previously higher and differentiated rates. Also none of the companies that responded are offering final salary pensions to new joiners and instead two-thirds of employers are offering defined contribution schemes and one third offering no pension at all.
Lyndsey Simpson, Co-Owner, The Curve Group comments;
The full results were as follows:
What type of pension does your company currently offer to new joiners?
Defined benefit/final salary pension 0%/ Defined pension contribution 66.7% /No pension 33.3%
Have the terms or contribution levels of the pension scheme offered to new employees of your company worsened in the last 6 months?
Yes 14%/ No 86%
How – change to T&C, re-engaged entire workforce, consistent now at 6%, the level the company gives has reduced
Have you recently introduced (or plan to introduce in the next 18 months) a pension scheme as a result of the new legislation introduced in October 2012?
Yes 40%/ No 60%
Was the pension scheme you introduced, in addition to usual pay and benefits?
Yes 91%/ No 8%
Does the financial burden of introducing a pension scheme restrict your ability to recruit new employees?
Yes 50%/ No 50%
Do you think the change in pension legislation, to ensure all companies provide a pension and auto enrol their employees in to it is a positive thing for the UK economy?
Yes 89%/ No 11%Back To News