Employers are turning their backs on defined-contribution schemes because staff are no longer interested in them, warns Sir Peter Davis, chairman of the Employer Task Force on Pensions.
The former Sainsbury's chairman says there has been a profound change in attitude by employers on pensions which is structural rather than cyclical.
The employer-led body has interviewed hundreds of employers about changes in attitude following the shift from defined-benefit to defined-contribution schemes across the job market.
Davis told an ABI fringe event at the Labour Party conference that interviews revealed a lack of confidence from employers, who are uncertain about liabilities relating to company schemes and to what extent they can promote their schemes to employees, as well as the impact of pensions credit on some employees.
He said uncertainty is acting as a “real deterrent against greater involvement” for both employers and employees.
David underlined that employers expressed huge dissatisfaction with the service standards of stakeholder pension providers.
The taskforce will report back to Work and Pensions Secretary Alan Johnson in December with its recommendations, which Davis said will include policy options for employers.
He said: “There has been a fundamental change on commitment to company pension schemes. Small businesses were worst, with little or no interest in pensions and a very disappointing lack of demand and interest from employees.”