Almost 90% of advisers believe the introduction of personal accounts will lead to employers levelling down contributions rather than closing existing schemes, according to a poll by Scottish Life.
One adviser in the majority says he expects employers to reduce contributions as the legislation forces more members into the scheme.
Steve Bee, head of pensions strategy at Scottish Life, says: “It’s clearly not a black-and-white issue and whether or not levelling-down happens as a result of these reforms may depend, at least in part, on how employers and their advisers react to events.”
Another adviser who expects to see lowered contributions says: “There will always be a central core of employers that for any number of reasons are willing to pay for quality pension arrangements but a great many of them will see this as an opportunity to reduce their expenditure."
However, other advisers disagreed including one who says: “Compare personal accounts to the minimum wage. Did employers reduce wages when that was introduced? Effective representation from employees will ensure employer contributions are not reduced.”
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