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NAPF highlights pension erosion

The National Association of Pension Funds has attacked the Government for "drilling holes" into the returns from occupational pension schemes.

The attack comes as the NAPF published its annual survey of company pension schemes last week. The survey shows that the Pensions Act 1995 and the decision in the last Budget to axe tax credits on dividends will hit company schemes hard.

Nearly 90 per cent of the 613 employers surveyed, which operate 833 schemes and have £370bn in assets, said the change to ACT will add costs to their schemes.

The NAPF warns that further attacks on company schemes would be detrimental to millions of scheme members. Director general Ann Robinson is urging the Government to increase the attractiveness of company schemes for employees.

She says: "A number of workmen are drilling holes in occupational schemes. The Government has an opportunity to release schemes from burdens following the Department of Social Security pensions review."

The survey shows that final-salary schemes are still dominant in the occupational pension market but money-purchase schemes have boosted their share of the market by two percentage points to 6 per cent.

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