Confederation of British Industry (CBI) guidelines
Best Practice Summary
The vision of the CBI's Pensions Strategy Group is that employers and employees should work in partnership - with the employer providing financial and other support to encourage savings and the employee recognising that it is his or her responsibility to save adequately for retirement. The Strategy Group believes this approach should create an environment where both parties take their responsibilities seriously, resulting in more widespread and adequate pension provision. In order to achieve this aim the Strategy Group suggests the following principles:
- Employers and employees have a shared responsibility for pension provision. All employers who can afford to should make contributions towards their employees’ private pensions when the employee similarly contributes. Where employer provision is offered on a matched basis, employees should be encouraged to contribute at the highest rate.
- Automatic opt-in leads to higher take up rates. Employers should automatically opt new employees into pension schemes after any waiting period has been completed.
- Differential access for senior executives is divisive. Employers should provide access to their occupational pension schemes to all employees based on the same eligibility criteria.
- Occupational provision is undergoing rapid change. Employers contemplating changes to their pension schemes should consider all the options available and undertake appropriate consultation to ensure that the changes balance the interests of the employer and its employees.
- It is in the interest of employees and employers to raise participation in the workforce of older workers. Employers should have flexible retirement policies to suit employer and employee needs. In particular, employers and employees should enter into constructive dialogue about flexible working around the normal retirement age.
- Financial awareness ensures informed decision-making. Employers should ensure employees have access to information on pension savings so that they can make informed choices and are aware of the consequences of not saving adequately for their retirement.
- Employee involvement in decisions about pensions policy will raise employee awareness of the value of occupational schemes. Employers should involve employees using appropriate pensions consultative arrangements or the normal employee consultative arrangements as appropriate.
- Trustees are the guardians of good pension scheme governance. Employers should ensure that boards of trustees of pension schemes are adequately equipped to take on their roles and responsibilities by providing appropriate training and support.
- Employees should be encouraged to join the “pensions ladder” at the earliest opportunity. Employers should have minimal waiting periods to facilitate this.