'Sea change in pensions' has occurred

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'Sea change in pensions' has occurred

Mon 12th Oct 2009

With the decline of the final salary pension, employees must now offer additional benefits to make retirement income an effective retention tool, says an industry insider.

Steve Rumbles, a spokesperson for Blackrock, pointed out that employers used to be able to offer final salary pensions as a good reason to stay at a firm, rather than move on to another company and see a drop in their income when they stop working.

Now that defined contribution schemes take up the majority of the market, people realise that their pension is more portable and can be taken elsewhere without a large impact on their return, he stated.

Mr Rumbles explained: "It plays more of a role now, certainly in the larger employers' space, as part of a benefits package, rather than a stand alone one."

His comments were made following research by the Chartered Institute of Personnel and Development, which showed that only 28 per cent of private sector employees know how much they should be saving for retirement.

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