Almost nine out of 10 large employers said they had recently reviewed their pensions strategy, or were planning to do so within the next 12 months according to new research by Capita.
Capita’s Future Face Retirement Survey, which was carried out in 2019, prior to the coronavirus pandemic, found that 93 per cent of these employers are keen to modernise their pension provision.
It also found 91 per cent of employers wanted more positive outcomes from their pension provision in terms of business and employer brand.
The survey found that businesses were keen to review pension provision in light of changing workforce dynamics and an ageing working population.
The survey was commissioned by Atlas Master Trust, as part of its white paper, looking at how employers can derive value for money from DC pensions.
Atlas says much of debate around value for money has, not surprisingly, focused on members, while many of the discussions around employers looks at their obligations, in regards to pension provision.
A spokesman for Atlas says it hopes to open up this discussion with the publication of this white paper, saying: “There is is seldom any reference to the benefits for employers. In this paper, against the backdrop of the latest convulsion to shake the industry in the shape of consolidation, we ask a single, fundamental question: What does a good outcome look like for employers, the sponsors of DC schemes, and how do they achieve it?”
The report adds: “While regulation is the driver behind workplace pension provision, most employers are nevertheless committed to enhancing their employees’ pension savings from an altruistic sense of duty, a belief that it is the right thing to do, and, increasingly, from a risk management perspective.”
It points out that prior to the economic shock of coronavirus UK employment levels gad reached an all-time high, with nearly two thirds of UK employers (64 per cent) reporting they had difficulty filling vacancies.
A decent pension proposition can help with this, as the Capita survey found that 86 per cent of employers said candidates and new entrants are now focusing more on the importance of pension provision.
At the other end of the scale an ageing workforce can create problems for some employers, particularly if older people can’t afford to retire. The report says that research indicates more than two-thirds (70 per cent) of UK workers, some 23 million employees expect to work beyond the age of 65 with the vast majority claiming this is because they cannot afford to retire.