UK - Companies would retain their final salary schemes if they received tax breaks from the government, new research concludes.
A survey by Mellon Financial Corporation revealed that some 80% of firms said they would not close their schemes if they received extra tax credits.
And some 60% also said they would raise employer contributions if the tax burden was eased.
Head of technical services at Mellon’s human resources and investor solutions group, Kevin LeGrand, said: “The cost burden imposed by the government on schemes has steadily grown over the years and our results suggest that the government should look at urgently reversing this.”
The survey of 229 employers – Key Pensions Issues Survey 2003 – found 81% were against compulsory provision, 79% would change or review their pension arrangements in the next five years, and 70% of those with DB schemes had considered switching to DC.
LeGrand called on the government to help boost employer confidence.
“The government needs to lead the way with effective, targeted measures such as bureaucracy reduction and further tax incentives.”
MPs failed to place legislation into the Financial Guidance and Claims bill that would have made pension guidance default, which Just Group director Stephen Lowe said left a "bitter taste".
Aegon has called for the government to double the tax exemption on employer-arranged pension advice, up from £500 to £1,000.
Institutional investor confidence in Europe rose by 8.9 points in April with each region showing growing appetite for risk, according to State Street Global Exchange.
It has again been suggested self-employed workers could enjoy pension provision through the tax return process. James Phillips explores the latest proposals.