Pension schemes still a strong recruitment tool

Pension schemes still act as an attractive recruitment and retention tool, despite negative media coverage, believe pension advisers at Taylor Patterson.

Recently, pension schemes have been the subject of national debate following strike action by public sector workers over proposals to increase the pension age from 60 to 65. Many pension schemes are also being closed to new employees because they are no longer financially viable for companies, as people are living for longer and enjoying extended retirements.

However, Andy Griffin, Taylor Patterson assistant group schemes manager, feels pension schemes are still an incentive to new employees. He said:

ìMuch of the recent publicity has surrounded defined benefit or final salary pension schemes which have fallen out of favour with many private sector firms because the cost of providing the promised benefits is unpredictable. Group personal pension plans, where the costs are known, have therefore become very popular recently.

ìMost people are aware that the state pension alone wonít allow them to continue to lead the same lifestyle when they retire. Pensioners have lots of free time and it is a pity if they cannot enjoy their retirement because they cannot afford the things they want. Pension plans are designed to help overcome this problem.

ìEmployees are more likely to join an employer sponsored pension plan than they are to make their own arrangements. These schemes help to create the impression of a caring employer and help to build a strong employer/employee relationship. The provision of a good quality pension scheme is therefore an ideal way to both retain existing staff and attract new staff.î

Pension schemes also have financial benefits to employers, and Andy believes they are a good way of reducing companyís tax bills. He said:

ìIt is often cheaper for an employer to pay a contribution to a pension scheme than it is to pay the same amount as salary, because salaries are subject to National Insurance contributions whereas employer pension scheme contributions are not.î

Taylor Patterson employs more than 50 staff at its Preston headquarters and additional staff in Cumbria and Sheffield. It provides a full range of independent financial advisory services, including investment, insurance, personal tax planning, pensions, corporate and personal financial planning advice, to small businesses, plcs and private clients.