Category: News
Date: 18.03.2005
Printable version
The 大象传媒's flagship business series The Money Programme has uncovered massive new pension black holes at the heart of some of Britain's best-known companies.
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In the final film of the special series Pensions Panic, to be broadcast tonight (Friday 18 March) at 7.00pm on 大象传媒 TWO, reporter Michael Robinson reveals that thousands of employees in companies such as WH Smith and Boots now have no pensions at all.
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While in recent years attention has been focused on the problems faced by traditional final salary pension schemes, The Money Programme has been investigating the more risky cash-based 'defined contribution' pensions which new employees in the majority of major British companies are now offered.
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Defined contribution pensions were introduced over the past ten years by most major British companies after they closed down their final salary schemes.
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But while final salary schemes are now carefully scrutinised by city regulators and company auditors, little attention has been paid to the defined contribution schemes which replaced them.
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The Money Programme team set out to discover how many of the employees eligible for these pensions had signed up to them.
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The results, reported by the programme, were startling.
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At WH Smith, Britain's best known newsagent, 82% of the employees who could sign up for the new pensions hadn't done so - which means around 14,000 of WH Smith's staff have no pension with the company.
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At Boots, Britain's best know chemist, 92% of eligible employees haven't signed up, leaving 30,000 staff with no pension at the company.
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And at Mitchells and Butlers, owners of national pub chains like All Bar One and Harvesters, a staggering 97% of eligible staff haven't signed up for the company's new defined contribution scheme, leaving around 11,000 staff with no pension at the company.
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These were among the very few companies prepared to disclose their take-up figures.
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Most of the major British companies the 大象传媒 team approached refused to give their figures.
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Commenting on the many major employers who refused to reveal their defined contribution take-up figures, Debbie Harrison - of the City University's Cass Business School Pensions Institute - told the programme: "I think for a lot of companies it's possibly an embarrassment that, as a caring employer, they have only 20% let's say of the whole of their workforce in their pension schemes.
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"It begs the question, 'What are you doing for the other 80%?' And the answer is, nothing."
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With defined contribution pensions, most companies only contribute anything to their employee's pension pots when the employee does as well.
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So low take-up of pensions by eligible staff is good news for company profits and for shareholders.
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Former Downing Street pensions adviser Dr Ros Altmann told the programme that employers had little reason to encourage take-up of defined contribution pensions among employees with their spending priorities.
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"If individuals don't value pensions and don't really want to put their own money in and the employer says, 'Well, if the individual doesn't want to do it, I don't need to encourage them to, and then I can get away with not putting my contribution in either', you'll have a situation which is developing in many companies where the finance director says, 'I don't see much value in putting money into a pension and I can get away without it, so why bother?'," Dr Altmann said.
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Notes to Editors
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If used please credit 大象传媒 TWO's The Money Programme.
