Pension Partnerships could ease burden on SMEs
In response to the Government’s Pensions Green Paper, the Confederation of British Industry has put forward proposals to help make running a pension scheme affordable for small firms.
The CBI warns that currently only 1 in 5 firms with between 50 and 100 staff can afford to run a scheme, and argues that business would be unable to support a compulsory pension scheme, which could cost up to £29bn. Such a move would put pressure on small firms, threatening the viability of some, and could also discourage staff recruitment.
The CBI recommends:
- The Partnership Pension, with a 3% Government pensions grant in the early years, and a minimum 3% contribution from employers and employees; and
- Assistance with the start-up of schemes involving groups of employers. Multi-employer pension schemes help to spread the financial burden between firms.
John Cridland, deputy director-general of the CBI, argued that ‘simplification will not achieve huge or immediate savings’ and that small businesses need to be given more incentives.
