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Employers urged to monitor staff pensions

Published On 28 March 2007 at 12:13:28

Many of the country's small and medium-sized enterprises (SMEs) are not bothering to review the performance of their staff pension schemes, a new report claims.

According to research carried out by Barclays Financial Planning, 25 per cent of SMEs do not check that the investments they have made with staff pension contributions are performing well.

Despite this, the vast majority (83 per cent) of SME owners believe that they should take some responsibility for the financial future of their staff.

Over half (52 per cent) of the pensions offered by SMEs are contract-based defined contribution schemes. Some SMEs offer their workers trust-based defined contribution schemes (16 per cent) and stakeholder schemes (12 per cent).

Stephen Ingledew, Director of Barclays Financial Planning, said that SMEs should make an effort to monitor their staff members' investments and keep them up-to-date with the progress of their pension.

"By improving monitoring and communication, staff would have a much better idea of where they stood and this might encourage them to contribute to the pension themselves, to help secure a comfortable retirement," Mr Ingledew added.

Recently, thisismoney.co.uk reported that the 'pension black hole' facing UK companies has shrunk by 40 per cent over the past year.

 

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