UK Firms Breaking The Law Over Pensions Access

by Robin Pilgrim, LawAndTax-News.com, London

13 March 2003

According to a survey released by insurance and pensions provider, Axa this week, many small and medium sized UK firms are breaking the law by ignoring their obligation to provide access to pension plans for their employees.

According to Axa, the worst offenders are firms with between 11 and 25 employees, more than a quarter of which admitted that they did not have a scheme in place. The study of 400 companies also revealed that 12% of firms with 26 to 100 employees, and 5% of companies with more than 100 employees were also failing to provide access to a pension scheme.

Currently, all organisations which employ more than 5 people have a legal obligation to provide their staff with access to a retirement savings programme. Speaking on Wednesday, head of pensions marketing at Axa, Steve Folkard observed that:

'This is a major issue requiring urgent action. It seems that companies of all sizes are unaware of their legal reponsibility to provide access to a pension scheme for their staff.'

The survey also revealed that of the firms which do offer a scheme, around 71% offer a defined contribution plan, and just 20% offer a final salary pension, in which the company rather than the employee shoulders the investment risk.

Recommended