Very few employers keep staff informed about their pension arrangements on an on-going basis, according to the CIPD’s annual reward survey.
It found that 88% tell staff about pensions during their recruitment and induction process, with only 46% updating staff about their pension arrangements on an ongoing basis.
Duncan Brown, Assistant Director-General for the CIPD said: “Employers are failing to communicate their pensions arrangements effectively after recruitment, which means that the full value of their rewards package is not appreciated, and employees don’t often understand the full importance of issues such as saving enough for their retirement.”
The survey also found that although 76% of employers carry out a regular appraisal of their reward policies, only 58% involve line managers in implementing the organisation’s reward policies and practices, which suggests that implementation of these policies often leaves something to be desired.
Secrecy about pay
Other findings reveals that a third of employers ask staff not to talk about their pay and conditions with their co-workers, while a quarter of them ask staff not to talk about their pay and conditions with people outside work.
Charles Cotton, CIPD adviser on reward and employment conditions commented that employers’ secrecy about pay could cause problems in the workplace and said: “Wherever practical, employers should be open about how salary levels are determined and how pay progression is managed.”
Pensions
The survey shows that 94% are still contributing to the pensions arrangements of their staff despite the tough economic climate. However, it found that employers are restricting final salary schemes to existing staff, with just under half of them offering such plans to new hires. This trend is especially prevalent in the private sector, with many employers introducing money purchase schemes for new staff, typically with lower contribution rates.
Brown said: “Pensions remain a key and often expected part of an attractive reward package which can enable them to recruit and retain staff in an increasingly tight labour market. Employer contribution rates are being reduced in an environment where we should be saving more for our retirement, and a new division is being created in many workforces according to when you joined the firm.”
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