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More employers cutting pensions

Clare Dobie
Tuesday 02 March 1993 19:02 EST
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MORE than half of employers are taking a holiday from making contributions to pension schemes, according to a survey by the National Association of Pension Funds, writes Clare Dobie.

The latest survey, covering pounds 207m of assets, 750 organisations and 4.5 million employees and pensioners, shows that in 55 per cent of all private sector schemes employers have stopped or reduced their contributions to pension schemes. The proportion rose from 48 per cent a year ago.

Pension holidays have been an important factor in buoying company profits. Contributions by employees were suspended or reduced in 21 per cent of cases.

Only 1 per cent of members of occupational schemes left those schemes last year, despite worries about security in the wake of the Maxwell fraud and publicity given to personal pensions.

Non-management employees are gaining ground as trustees, with the proportion of schemes having employees other than managers as trustees rising from 59 to 65 per cent last year.

There was a rise in the proportion of schemes guaranteeing increases in pensions from 70 to 74 per cent.

Self investment - investing pension money in the sponsoring company - is allowed by the rules of 60 per cent of all schemes.

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