Manufacturers' organization the EEF has publicized its support for compulsory pension schemes in a report that calls for a radical overhaul of the UK's pensions system.
The move comes as employers face increasing pressure from the government to help workers plan for their retirement. A recent report by Aon Consulting revealed that only 5% of pension plans in the UK are fully funded, while a trade union survey found that only 6% of UK job adverts actually mention workplace pension packages.
The new report by the EEF, which represents 6,000 manufacturing, engineering and technology firms, forms part of a proposal for a drastic restructuring of the whole UK pensions system that the organization has submitted to the pensions commission, which will make recommendations to the government on how to tackle the pensions crisis.
In the report, the EEF advocates a drastic restructuring of the UK pensions system by 2015, which will involve compulsory contributions by employers and workers of 2% of earnings each, increasing over time to 4%. It also calls for an enhanced basic state pension, which will force the government to take some responsibility for some of the funding for future pension provision.
We have to recognise that putting a sticking plaster on the current pensions system is no longer an option and that government, employers and employees will all have to play their part in the future funding of pensions in the UK, commented Alan Wood, EEF president. We now need a frank and open debate so that all parties understand the various options for addressing this important issue as we seek to build a consensus on the way forward.