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Four out of ten NAPF members plan on 2012 auto-enrolment

Sixty per cent of pension funds will be changing their schemes from their current form by 2012, according to the National Association of Pension Funds.

The NAPF survey found that much uncertainty remains over the impact of personal accounts – 41 per cent of members say they will maintain their scheme in its current form and auto-enrol their employees into it. The risk of levelling down remains still though, with 8 per cent of schemes planning to reduce their contributions in 2012.

A further 10 per cent of members said employees who do not choose to join the existing pension would be auto-enrolled into personal accounts at the minimum level and a further 13 per cent are proposing other changes. More than a quarter of schemes have yet to decide what action they will take.

Members have also called on the Government to support workplace pensions with more long-dated gilts.

According to a survey by 300 NAPF members, more than eight out of ten think Government issuing more long-dated and index-linked gilts would help to reduce workplace pension fund deficits and liabilities.

The survey also found that the recession has continued to take its toll on private sector defined benefit pension schemes – 23 per cent of schemes remain open to new members, compared to 28 per cent a year ago. The NAPF says DB schemes will continue to be closed over the coming years.

Contributions to defined contribution schemes have not been cut back as a result of the recession. The survey also found that the average contribution rates to DC schemes have remained stable and now stand at 11.5 per cent. Ten per cent of schemes have suggested that they will increase contributions in future.

NAPF chief executive, Joanne Segars says: “The Government can no longer sit on its hands. It must take bold and positive action to help support employer-sponsored pensions.

“The Chancellor has a golden opportunity to make a difference in his pre-Budget report by announcing that the Government will issue more long-dated and index-linked gilts. It is an opportunity that must not be missed.”

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