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Firms face 8bn costs

Company pension costs will escalate by 8bn within eight years if the Government goes ahead with its proposed reforms, says Aon Consulting.

It says the national personal accounts scheme will add a further burden on businesses which are struggling under the funding requirements of The Pensions Regulator.

Aon estimates that a further 2.3bn in pension costs will be passed on to employers under the NPAS although this will be phased in over a three-year period beginning in 2012.

Added to the 5.8bn in funding requirements from the Pensions Regulator for defined-benefit schemes, this is equivalent to almost 2 per cent on the UK’s wage bill, according to Aon.

Chief actuary Donald Duval says: “These additional costs are likely to translate into lower profits for shareholders, higher prices for customers or lower salaries for employees.”

The Confederation of British Industry director-general Sir Digby Jones says: “Compulsion will cost employers 2.3bn and they will need help in managing this burden.”

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