22.09.10

Report Highlights Extent of Private Sector Workplace Pension Provision

As concerns continue to grow about how individuals are going to be able to fund their likely extended years in retirement, a new report highlights the extent and nature of pension provision among private sector employers in Great Britain.

The Employers’ Pension Provision Survey 2009, commissioned by the Department for Works and Pensions, surveyed a sample of just over 2,500 private sector employers.  It is the eighth such survey to have been conducted since 1994, the previous one having been conducted in 2007.

The study estimates that in 2009, just over a quarter (28 per cent) of private sector employers were making some kind of pension provision (down from 41 per cent in 2007) and that only 27 per cent per cent of private sector employees were members of a work-based pension scheme of any kind.

Its other findings include:

  • One quarter of private sector firms had some form of pension provision that was open to new members in 2009.
  • One in ten private sector organisations had an open pension scheme that attracted employer contributions. 
  • Just under half of all occupational schemes (48 per cent) were open to new members – the same proportion as in 2007. The remainder were closed to new members. Around three-quarters (74 per cent) of closed schemes were accepting contributions whilst the remainder were frozen.
  • Workplace-based stakeholder pension (SHP) schemes continued to be the most common form of provision in 2009. They were provided by 23 per cent of all firms. Five per cent of firms provided group personal pensions (GPPs), five per cent made contributions to employees’ personal pensions and two per cent provided occupational schemes. Less than one per cent made contributions to employees’ private SHPs.
  • Four-fifths (83 per cent) of occupational schemes had fewer than 20 members among the firm’s current workforce. 
  • Just over a quarter (27 per cent) of private sector employees are members of a work-based pension scheme. Thirteen percent belong to occupational schemes, eight percent to group personal pensions, five per cent to Stakeholder pensions and one per cent had an employer contributing to their personal pension.
  • The rate of employer contributions received by the average active member of an occupational scheme was 17 per cent for members of defined benefit schemes and seven per cent for members of defined contribution schemes.
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