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&#39Most stakeholders are just shells to meet Govt&#39s rules&#39

The vast majority of group stakeholder plans have been set up as shell schemes to satisfy Government requirements, according to consultants Towers Perrin.

Of the employers surveyed, 41 per cent had set up stakeholder with no contributions. Only 11 per cent were contributing to GPP or stakeholder schemes, 9 per cent defined-benefit schemes and 22 per cent had done nothing.

Towers Perrin head of financial planning Robert Ivey said the average employer contribution for a stakeholder plan is only 2 per cent compared with more than 12 per cent for defined-benefit schemes.

The consultancy released two surveys at its conference, Gazing into the Abyss, in London last week.

One looks at employee attitudes towards their pensions and the other reveals the realities of what employers are contributing.

The survey concludes that despite this situation, 90 per cent of employees expect a secure and stable retirement, which they define as at least half their current income level.

The surveys asked 1,005 employees working for firms with more than 1,000 staff and 185 employers covering over one million employees.

Ivey said: “This problem needs to be solved between employers, advisers, prov-iders and people themselves.

Scottish Equitable director of pensions development Stewart Ritchie says: “I am not surprised by that. If you look at the ABI&#39s statistics for GPP sales compared with stakeholder sales, you see very significant disparity bet-ween the volumes of contributions coming in on GPP versus stakeholder.”

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