11 May 2009
According to research carried out by Punter Southall, the
introduction of personal accounts is in danger of becoming an
expensive failure and may be delayed beyond 2012. Of 300 companies
polled, 80% of employers with defined contribution schemes (i.e.
money purchase schemes) said they are planning to retain their
existing scheme after the launch of personal accounts and only 2%
intend to offer the new scheme.
Punter Southall warned that low take-up of personal accounts
could drive up management costs and mean that employees face a
prohibitive fee to join but the Personal Accounts Delivery
Authority (PADA) has denied the possibility of delays and increased
costs.
PADA said: "We don't expect huge numbers of companies with
existing pension schemes to use us across the workforce - we are
designed to complement existing provision. A major part of our
customer base will come from employers without existing pension
schemes. We are on track to implement the personal accounts scheme
in time for the onset of employer duties in 2012. We envisage that
the scheme will deliver a good quality pension with a low charge.
and help millions save for retirement."
