Pension payment may be cut due to crunch

Tue, 03 Feb 2009

Adverse economic circumstances could affect pension contributions amongst thousands of firms struggling to keep afloat. With employee pension contributions already suffering, drastic action may force many businesses to scrap pensions altogether.

Pensions advisers and consultants are seeing an increase in advice regarding how to reduce pension costs . Paul McGlone, principal at pension consultants Aon, reportedly commented: "We are talking to clients about it - it's not something that they want to do, it's a last resort, but cashflow is absolutely critical for them. Pensions is a big cost."

The general secretary of the TUC, Brenda Barber, reportedly commented: "Cuts in employer contributions to defined contribution pensions are nothing more or less than a cut in wages, and will meet with an immediate and robust response from unions, especially when there is any evidence that employers are using the recession as an excuse to cut contributions they can easily afford."
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