January 16, 2010

Employers to cut workers’ pension contributions

Filed under: Uncategorized — ktetaichinh @ 7:12 am
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Tens of thousands of employers are set to cut the contributions they make to their workers’ pensions as a result of the Government’s new pension reforms, the Liberal Democrats claim.

he party said it worked out that 42,000 employers will make reduced contributions under workplace pension reforms announced today. Steve Webb, Liberal Democrats’ work and pensions spokesman, said: “Government boasts that its workplace pensions reforms will make everyone better off in retirement are fanciful

“How will people be better off if their employers cut the money they put into their pensions?

“It is now more important than ever that we have a decent state pension that people can fall back on.”

Katja Hall, the CBI’s director of employment policy, said: “The CBI supports moves to encourage more people to save for their retirement.

“The changes announced today show that the Government has listened to businesses. We are pleased that firms will face fewer short deadlines and less paperwork than was previously proposed, particularly given the challenging economic conditions.

“However, discussions are still taking place about how these reforms will affect firms with existing pension schemes.

“The Government needs to ensure it does not make the system too onerous for companies who are already doing more than the law will require, or it could encourage them to cut contributions to the legal minimum.”

The TUC welcomed the announcement by ministers setting out the detailed rules for the operation of auto-enrolment into employer-backed pensions from 2012.

General secretary Brendan Barber said: “This is a major step forward in building a new and progressive pensions system based on the auto-enrolment of workers into pensions and compulsory employer contributions.

“Millions of workers who have never had the chance to build up their own pension will now start to save.

“No lobby group will have got everything they wanted today, but all have got a workable and balanced set of rules for the new system.”

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