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Pensions Act leads to cost-cutting

Thursday 14 March 1996 00:02 GMT
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Employers hit by Pensions Act changes

Employers are becoming increasingly concerned at the costs of complying with the 1995 Pensions Act, and one in six has already changed its scheme significantly, and almost one in three is actively considering changes, according to a survey by independent pension scheme administrators Hartshead Solway.

Only 23 per cent of firms claim to be making changes to improve benefits for employees, compared with 39 per cent who say they are complying with the new legislation and 38 per cent who say they are making changes to cut costs. The changes will accelerate the transfer of pension schemes to independent adminstrators, and the replacement of pensions related to average salaries by schemes based on investing a set percentage of earnings. This could reduce total contributions and also transfer the risks of poor investments reducing pension payments from the employer to the employee.

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