Stakeholder pensions causing firms problems

Many companies will struggle to meet the demand of promised final pension schemes.

A survey by the National Association of Pension Funds (NAPF) showed that 75 per cent of firms offering the schemes are doubtful over their ability to meet future payments of stakeholder pensions.

It estimated that final salary schemes now cost firms 16.6 per cent of present salaries, up on 15.7 per cent the previous year.

NAPF CEO Christine Farnish concluded: "The picture which emerges from today's survey is one of firms struggling to maintain a commitment to providing decent pensions for their staff, while policy makers - far from supporting their efforts - impose further burdens."

She added: "Even the most committed firms are now struggling to manage costs."

Companies are switching now from final salary schemes to money purchase packages which guarantee only the level of commitment, and not the pensions intrinsic value.