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12-Mar-08 11:10 [Pensions]
Benefits of occupational pensions highlighted The National Association of Pension Funds (NAPF) has urged both employers and employees to pay heed to the benefits of occupational pension schemes.
Official figures from the Government Actuary's Department show that the numbers of people actively contributing to occupational pension funds fell from 9.8 million to 9.6 million between 2004 and 2006.
A spokesperson for NAPF said: "For many employers an occupational pension is a core part of the employment package offered to staff and it tends to help with not only recruitment but also staff retention. Research also shows that employers want their staff to retire with financial security and feel it is part of their corporate social responsibility role."
They are also highly beneficial for employees, he continued.
"With tax relief and an employer contribution, they are essentially benefiting from 'free money'," the spokesperson said.
Many experts have predicted that the government's alternative to occupational pension schemes, personal accounts, will not be as good for either employers or employees.
There are widespread fears of "levelling down", whereby businesses would reduce the standards of their provision to the legally stipulated minimums.
Pensions minister Mike O'Brien, however, has insisted that the government is aware of this risk, saying: "We are not complacent and will continue to work with employers and the pensions industry to guard against levelling down."
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Up to 40 per cent of final salary schemes in the UK are expected to close to existing members over the next decade, it has emerged.
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Over £2 billion worth of pension credits will go unclaimed this year, new research has found.
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