Nearly one in three workers accept a new job without knowing whether or not the package includes a pension, according to a survey by the NAPF. If true (and I have no reason to believe that it isn’t) it is an alarming statement, both because of the apparent insouciance of those concerned and also because it indicates the extent to which pensions have become discredited as a worthwhile benefit.
There are lots of reasons for this, of course, from the Maxwell scandal that robbed thousands of people of their pensions, to the drift (or stampede, as it has become) of employers moving away from Final Salary pension schemes and towards Money Purchase schemes which are seen – rightly in most cases – as being of inferior quality. There’s always been a tendency for people to make inadequate provision for their retirement, with so many other calls on their finances, and current economic constraints don’t help to change the picture.
Nonetheless, a good employer’s pension scheme should be an excellent selling point to potential employees and even now, with the Final Salary pension more or less a thing of the past, employers who offer good levels of contribution into a Money Purchase scheme should be using it as a USP to attract high calibre employees to their company. Of course, it’s difficult to interest people in something that won’t give them any tangible return for decades, in some cases, but any employee who turns down membership of an employer’s pension plan is effectively turning down the opportunity to be paid extra money for doing his or her job and only a fool would refuse that. It appears, however, that there are lots of fools out there.
With auto-enrolment to employers’ pension schemes taking effect in a year’s time, it may be that more people will take advantage of this benefit, by default, but in the mean time, if you’re an employee who hasn’t joined your employer’s pension scheme at the first available opportunity, maybe you should re-visit your decision (I should probably stress, at this point, that I’m not qualified to give financial advice and you should not treat these casual musings as constituting advice of any kind). If you’re an employer with a pension scheme, maybe it’s time to review how effective it has proved to be as a recruitment tool and how it’s perceived by your employees. If you’re not sure of the answer, it’s worth some time, effort and – dare I say? – expense to find out how to make it work better for you.
Pension schemes are expensive to provide and administer, and should form the backbone of your benefit structure. Surely that’s worth taking some trouble over?