Pensions: Firms must work harder

A report from the CBI said many staff are put off saving for retirement by the relatively poor perception of DC pensions which have largely replaced the much favoured final salary schemes of the past. The report, Saving For Tomorrow, found that firms which engaged and supported staff, and gave clear signals about pensions, then benefited from increased take-up and higher satisfaction levels. Employers are concerned about the take-up of DC pensions, and the CBI warned that more staff need to save for retirement to minimise the threat of a pensions crunch. A CBI survey showed that 69% of senior executives feel that employees do not properly value their DC scheme, despite a clear upward trend in contributions. Recent data from the Office of National Statistics shows that the number of private sector workers saving into occupational retirement plans fell by 400,000 last year to 3.6 million. CBI director-general Richard Lambert (pictured) said: "Too many employees are not saving for their pension, even though there is often an excellent employer scheme open to them. Sometimes this is due to a lack of understanding of the benefit on offer, but often it can be explained by the negative view of defined contribution that has prevailed in recent years. “Our research shows that these unfair and pessimistic views can be changed if firms strive to engage and communicate with staff. Once employees feel more involved, businesses report improvements in pensions uptake, and stronger employee relations.” The report showcases 11 firms for having outstanding commitment to their DC schemes, and clear leadership in engaging their staff on pensions issues. These include manufacturing giants Siemens and GSK, as well as smaller organisations like Northumberland-based decorative surfacing materials manufacturer Cova Products.