Too many people are sleepwalking into a job with no idea about its pension provision, and employers are not doing enough to help them, the UK’s leading pensions body warned today (Weds).
Its research shows that only 56% of people knew if there was a pension when they applied for their current job. And fewer than one in eight (12%) job adverts carries any pension information at all.
With employer contributions into a workplace pension worth anything up to 35% of salary every year – over £8,000 for someone on an average wage - the National Association of Pension Funds is urging employers and HR directors to ‘mention the pension’ when recruiting.
An NAPF survey, run with pollsters Populus, shows that a fifth (22%) of employees only found out if there was a workplace pension after they had already started the job.
On the day that its Annual Conference and Exhibition opens in Liverpool, Joanne Segars, NAPF Chief Executive, said:
“It is astonishing that so many people are sleepwalking into a job without knowing if there’s a pension.
“The UK faces a growing retirement saving crisis. Treating the workplace pension as an afterthought has serious implications.
“A good pension is a vital part of any reward package. It’s not a ‘nice to have’ or a fringe benefit, like a gym. In some cases it can be worth up to a third of annual salary. People need to think about the pension right at the start of any jobsearch.
“Employers can do a lot more to mention the pension. The lack of pension information in otherwise wordy and detailed job adverts is a concern. It’s simply not good enough to say once a job offer has been signed – oh by the way, there’s a pension.”
The NAPF is writing to the UK’s main human resources body the CIPD, and to the Recruitment and Employment Confederation, urging them to raise this issue with their members in the HR and recruitment professions.
The NAPF is calling for employers to be clearer about whether there is a workplace pension, and what type of pension it is – such as final salary, career average, or defined contribution.
Where there is a clear employer contribution rate, often a percentage of annual salary as in many defined contribution schemes, the NAPF believes the employer should be more explicit about the terms.
Ms Segars added:
“The conversation about a pension is coming far too late in the recruitment process. And in a fifth of cases it doesn’t seem to happen at all.
“Employers trying to recruit the best talent may be missing a trick by not mentioning the pension as early as possible. Three quarters of staff feel more positively about employers who offer a pension over those who don’t.”
Eight in ten (79%) said they would be more likely to apply for a job if it offered a good company pension.
41% think that a pension is the most important benefit on top of basic salary that an employer can offer – over twice the proportions specifying bonuses or flexible working.
And an overwhelming 94% of employees think that firms should be clearer about pension arrangements when they are recruiting.
In addition to the UK-wide Populus survey, the NAPF ran its own separate and in-house study of 200 online and newspaper job adverts. Only 12% mentioned pension provision at all. In contrast, 71% specified the salary. The study found that only two job ads out of the 200, or 1% of the sample, specified the pension contribution rate.
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