· 1 min read · News

NAPF calls for Government to support occupational pensions in light of its recent findings


The recession is continuing to damage the private-sector pension market, with less than a quarter (23%) of private-sector defined-benefit (DB) schemes still open, compared with 28% this time last year.

According to research from the National Association of Pension Funds (NAPF), employers want to see ‘decisive action' from the Government to support workplace pensions, in light of the findings. 

The allocation of equities into private DB schemes is also dropping - it now stands at 44% compared with 51% a year ago.

This is as a result of both falls in equity values and continuing de-risking by pension funds. The allocation to fixed-asset classes has increased by 5% and this now stands at 38% on average.

But contributions into defined-contribution (DC) schemes have not been cut back due to the economic turmoil and contribution rates remain the same as this time in 2008 at 11.5%.

But uncertainty remains surrounding personal accounts, due to be implemented in 2012, as 41% of employers still think they will maintain their current pension scheme and auto-enrol staff into that.

Joanne Segars (pictured), NAPF chief executive, said: "Our survey shows the high levels of commitment employers have in providing good quality pensions for their staff; but the recession has made their job more difficult.

"The Government can no longer sit on its hands. It must take bold and positive action to help support employer-sponsored pensions. The chancellor has a golden opportunity to make a difference in his Pre-Budget Report by announcing that the Government will issue more long-dated and index-linked gilts. This single measure would benefit pension funds by helping to reduce deficits and support corporate scheme sponsors by reducing the scale of pension fund liabilities on their balance sheets.

"It is an opportunity that must not be missed."

Joanne Segars is HRmagazine.co.uk's new monthly columnist and she will explain why HR people are increasingly finding themselves in the pensions spotlight. Look out for her first article later this week.