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Call for employer action to boost pension take-up

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Over 8 in 10 employer-sponsored stakeholder pension schemes remain ‘empty boxes’ with no pensions yet active, according to new research.

The report, Stakeholder pensions – time for change, by the Association of British Insurers, calls for more action to help employers promote pensions take-up.

Currently, 350,000 employers have designated a scheme but 82% remain ‘empty boxes’ with no members and only 13% of employer-based schemes have employer contributions.

The ABI proposes a 5-point Employer Action Plan to be taken up by the Government’s new Employer Taskforce:

1. A Government-led programme to encourage employers to promote the schemes they sponsor.

2. Permitting employers to promote the schemes they sponsor, eg by exempting them from the Financial Promotions Order.

3. Helping employers meet the costs of advice through a Workplace Advice Tax Credit.

4. Giving practical help to employers via the Government’s proposed Employer Information Pack.

5. Requiring employers to do more – eg requiring them to give each employee a leaflet about the scheme they sponsor.

Mary Francis, Director General of the ABI said: “Stakeholder pensions have so far fallen short of expectations” but “we know active employer involvement in pensions works”.

“Pensions are inextricably linked to the workplace. Our proposals will involve employers and help them help their workers,” she added.

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