Within these schemes, both employee’s contributions and employer’s contributions are invested. The proceeds are then used to buy a pension and/or other benefits at retirement.
According to the latest CBI/Mercer Pensions Survey, most employers (86%) continue to see a strong business case for providing competitive workplace pensions, despite the difficulties of the pandemic. The same percentage of companies also said they feel a moral obligation to help employees to save for retirement. The survey was completed by 221 firms across the UK.
Meanwhile, 76% of senior executives who responded to the survey said they believe that, going forward, business contribution rates higher than the current 8% statutory minimum will be required to ensure staff have an adequate income in retirement.
Meanwhile, the UK government says that from October 1, pension schemes with an asset value of £5 billion or above must report the risks and opportunities that the climate crisis poses to their investments.
According to the survey, 47% of UK companies with a defined contribution scheme say that disclosures will be a helpful way to engage staff with their future savings. However, understanding the requirements is low amongst trustees (8%) and employers (5%). Many businesses believe the cost of publishing complaint TCFD-aligned disclosures will be larger than the government’s £15k estimate.