Advantage Firms, But Are Pensioners on the Losers’ Side?
In a recent declaration, the CBI has stated that firms should not be forced to pay into pension schemes.
CBI has come out full force to back up the thought that companies should not be compelled to contribute to employee pension schemes (EPS), as it can have an adverse effect on employment and push some small firms into bankruptcy.
In response to the Lord Turner’s pensions’ commission, the employers’ body stated that automatic enrollment of firms and employees into schemes with an option of having the right to opt out, is a much better way to encourage greater saving for retirement.
The commission has also proposed a scheme whereby workers can opt for a company pension scheme or be a part of the government controlled National Pensions Savings Scheme (NPSS), contributing 5% of their salary whereas firms would be forced to contribute 3% of salary.
Employer’s body has proposed that if the firms decide to opt out of the scheme or the NPSS, they would have to explain to their staff ‘Why?’ Thus, making sure that the proposal is designed to sweet talk employers into it and not forcing them into voluntary contribution.
CBI has suggested proposals of its own. Under a “pension builder”, employees would put some of their annual pay rise into their pension. A “partnership pension” would pay the 3% contribution but the government would pay a third of it.
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