Mercer, a provider of consulting and outsourcing services, has welcomed the UK government's proposal to allow automatic enrolment into contract-based pension schemes from 2012 as an important move in helping to secure retirement income for employees.

The company has said that the proposal is a significant step in giving companies with these schemes the same rights as those providing trust-based arrangements.

Tony Pugh, UK head of defined contribution (DC) pension services at Mercer, said: Organizations that are strategically reviewing their approach to defined contribution pensions should now be able to compare more objectively the merits of trust-based and contract-based arrangements. They can now have more confidence that neither will be regarded more favorably in the context of personal accounts.

Those employers who already offer contract-based arrangements to their employees now have one less thing to worry about around the impact of personal accounts.