Three-quarters of advisers expect the Government to compel employers to contribute to funded pension...
Three-quarters of advisers expect the Government to compel employers to contribute to funded pensions, according to research from Scottish Equitable. The provider interviewed more than 1,800 intermediaries at its roadshows and found that 75% expected the Government to introduce compulsion on employers.
But the company is not convinced that compulsion is imminent. Stewart Ritchie, pension development director at Scottish Equitable, said: 'While it is essential that action is taken to achieve the aim of better pensions for all, for political reasons we think that the Government will view compulsion as the last resort.'
Ritchie argued that the Government is more likely to devise other means to boost private pension provision. He said: 'We believe that the Government is more likely to soften the compulsion burden by using a carrots and sticks approach.' He said carrots may include reduced national insurance contributions while sticks may include the adverse tax treatment of pension plans of directors and senior executives.
Another means of encouraging employers to contribute to their staff's pensions would be to improve the rebates for contracting out of second state pension, said Ritchie. He said the recently revised rates were too low to encourage many empl-oyers to introduce or improve the provision they made for their employees. The next Scottish Equitable roadshow will be held during the spring.
Slow progress in improving diversity
Share purchase deal with assets of £28m
Came into effect in January
Three examples of compensation rule issues
Buying in baskets