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No-pension companies 'breaking law'
March 12, 2003
Research claims at least 25,000 companies are breaking the law by not providing staff with a pension scheme.
The study, carried out by insurer AXA, found 16% of companies with an annual turnover of at least £1 million are ignoring rules saying companies employing more than four people must give staff access to a scheme.
The survey of 400 companies found 25% of firms with 11 to 25 employees did not have a scheme, while 12% of firms with 26 to 100 employees and 5% of companies with more than 100 staff did not offer one.
Steve Folkard, head of pensions marketing at AXA, said: "This is a major issue requiring urgent action.
"It seems that companies of all sizes are unaware of their legal responsibility to provide access to a pension scheme for their staff."
Of those firms which do offer a scheme, 71% offer a defined contribution one and only 20% offer a final salary pension, in which the company rather than the employee shoulders investment risk.
Around 16% of firms said they planned to increase the amount they contributed to their pension scheme, while 3% said they planned to reduce the money they paid in.