The new UK’s national pension scheme is under the threat of being delayed beyond 2012 due to a lack of employer take up, which will result in costs going up.
The research, carried out by Punter Southall Financial Managment, who specialise in employee benefit consultation and pension administration services, believe that the scheme will not be right for big companies. In particular the report states that there will be no economies of scale and fees will therefore increase for the smaller firms involved.
Eight out of 10 firms who have defined contributions already in place, were planning on continuing with the existing company pension schemes after the start of the new schemes in 2012 and only 2% were looking to offer the new personal pension accounts.
Despite the findings by Punter Southall, the Personal Accounts Delivery Authority (PADA), who are managing the scheme, have said that there is no possibility of a delay in launching the new schemes or increased costs.
The PADA are expecting to deal with thousands of employers and millions of employees, which they say will be enough to keep costs down and create enough economies of scale.
The plan is that the new schemes will merely compliment existing provisions but Punter Southall aren’t so convinced and it seems that neither are the larger employers.