Employees face prospect of bare minimum pensions
Employees in Northern Ireland are facing an uncertain future over pensions thanks to the predominance of small businesses in the region, a business advisory firm said.
Mark McClintock, a pensions partner at PricewaterhouseCoopers in Belfast, said the future of pension provision UK-wide was "uncertain" due to the recession and government intervention. But he said uncertainty was heightened in Northern Ireland.
"This is increasingly difficult in regions like Northern Ireland where businesses are small and often family-owned. Our research shows that the smallest companies are likely to offer bare minimum pension required by law under auto-enrolment from 2012.
"With the pensions industry in crisis, government and employers will have to come up with radical new approaches towards both employee reward and encouraging long-term savings."
PwC carried out a survey of 179 UK employers which found many firms were turning their backs on final salary schemes. Almost a third had closed them to existing staff, while another 30% intended to shut the schemes in the future.
Mr McClintock said the size and volatility of pension funding costs, and concerns about the inequalities of pension provision in the workforce were hastening the demise of final salary schemes.
Mr McClintock said: "There is growing alarm that the continued provision of defined benefit pensions could jeopardise the business as a whole."