It seems that American Express may set a trend and employees could see more companies stop making pension contributions (for the time being) in order to save money.
American Express made the surprising move to stop paying money into pension schemes as part of their bigger plan to cut costs. They are the first high profile company to introduce such a policy and are not going to be the last during the recession.
Pensions are the obvious target for businesses looking to cut their costs. They have been dwindling over the past few years, at the hand of Gordon Brown and now it seems that we are nearing closer to people looking at getting their own pension schemes.
New legislation being introduced in 2012 will mean that it will be compulsory for employers to contribute at least 3% to pension schemes. Employees can opt out of this scheme, which then means that an employer is not obliged to provide the pension scheme.
With company pension plans closing all the time, it looks as though employees will no longer be able to rely on their employer to help them save for their retirement. Although the move now will ultimately save jobs, it will mean that those who are affected will have to make pension provisions themselves.