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Employers overcome red tape to provide pension schemes


‘Red tape’ and increasing regulation is making it increasingly difficult for companies to provide good quality occupational pension schemes, according to a new survey from the National Association of Pension Funds.

The survey finds that those responsible for administering and setting up company schemes are finding it increasingly difficult to comply with the amount of bureaucracy created by changes to government regulations aimed at encouraging private pensions.

94% of respondents to the survey said that managing and providing occupational schemes needed more resources than five years ago, with 90% saying that they thought the situation would get worse over the next five years, in the main because of more complex legislation.

Among the key areas of legislation which employers are struggling with are the rules on pensions and divorce and the rules regarding internal disputes procedures. Complexity of regulation and administrative difficulties were also blamed for the reluctance of schemes to take advantage of the increased flexibility allowed in relation to Additional Voluntary Contributions.

Despite these problems, there was still a willingness among respondents to continue to provide good quality occupational schemes as part of a move towards extending and improving benefits for staff. 86% of those being eligible to join a scheme do so, with 79% of private sector schemes now providing a pension for common law spouses and 50% of private schemes also paying benefits to dependants in same sex relationships.

The requirement for employers to provide access to Stakeholder Pensions, which are due to be launched in the Spring, was unlikely to cause any major problems for any of the companies questioned. More than 60% of respondents representing larger organisations were in support of more legislation which would allow more flexible retirement plans to allow older workers to stay in work for longer.

David Cranston, NAPF Director General, said: ‘The Survey shows that employers continue to offer their staff improvements to their occupational pension schemes despite the continuing onslaught of regulation. The NAPF will be seeking further meetings with Ministers to see how these onerous burdens can be reduced. The NAPF is keen to support the Government’s objective of a shift from State to private pension provision, and these continuing efforts can only help.’

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