The directors of the ABI and manufacturers’ organisation EEF have issued a joint statement on pension reform calling for ‘soft compulsion’ on pension contributions by employers.
The statement issued by ABI director Stephen Haddrill and EEF director general Martin Temple on the eve of the Turner report, says the government now faces a unique opportunity to address under-saving for retirement in the UK.
It says: “In order to ensure that company pension schemes have the desired effect, we support the idea that employers must pay into their employees’ pension, as long as the employee chooses to make a contribution.”
“There is compelling evidence to show that this will have a dramatic effect on overall savings – where an employer makes a contribution, employees are five times more likely to put money in themselves.”
“We believe that with the right regulatory structures and phased implementation, businesses of all sizes will be able to absorb the cost of ‘soft compulsion’. The Government must take the opportunity presented this week to lead a constructive debate about comprehensive reform that ensures all concerned play their part in closing the savings gap.”