The Association of Consulting Actuaries is warning of a “pension apartheid” after its research found widespread concern among companies that personal accounts will damage existing provision.
The ACA found 68 per cent of employers believe that personal accounts will lead to a levelling down in employer contributions while 76 per cent predict more closures of better workplace schemes.
Thirty-one per cent of all employers and 42 per cent of small firms said they are likely to restrict occupational scheme entry as a result of the reforms.
The ACA says: “This growing pension apartheid within the private sector builds on that already developing at pace between private and public-sector employments.”
However, the ACA found three-quarters of companies oppose placing a cap of less than £5,000 on annual contributions to personal accounts, which it puts down to a resistance to further prescriptive regulation.
Chairman Ian Farr says all too often over the last 20 years, well-intended legislation has led to damaging consequences for good existing pension provision. He says: “The idea behind personal accounts is laudable – extending pension coverage to more employees – but it is clear from these findings that many may lose out unless great care is taken.
“Regulatory easements and real positive support for good existing and new workplace arrangements is a vital element of reform. This must be effective ahead of 2012 when personal accounts are set to be introduced.”