One in four companies looking to use group corporate SIPPs as their main pensions vehicle

Published at 10:14 AM on 19 February 2009

One in four (27%) UK businesses are considering setting up a corporate self-invested pension plan (SIPP) both as their main pension arrangement and to enable their employees to roll over maturing shares in company share plans, according to PricewaterhouseCoopers LLP (PwC) most recent pensions survey. Seven per cent have already implemented a corporate SIPP and PwC is advising a number of FTSE100 companies in this area. 

98 companies (including 29 FTSE100 organisations) participated in the 4th annual PwC Pensions Survey, the full results of which were released last week.

Corporate SIPPs can have several advantages over traditional defined contribution arrangements and group personal pensions (GPPs). Members can be offered greater investment flexibility, including the ability to invest in shares of their employer, and members’ pensions accounts can receive assets in specie from company share plans, incentive plans and other pension arrangements. Tax breaks can provide a further incentive for members and boost overall retirement savings.

Marc Hommel, partner and UK pensions leader, PricewaterhouseCoopers LLP, commented:

“With the increasing exodus of employers from defined benefit pension provision, employees are accepting the need to take personal responsibility for their retirement savings. As such, they are looking to their employers to provide access to understandable and affordable savings vehicles. More and more employers are starting to appreciate the benefits that group corporate SIPPs offer by giving employees flexible and cheaper retirement savings opportunities than they could secure on their own.”

83% of employers surveyed are concerned about lack of value for the money they are spending on pensions provision. To address this, almost half of the companies (45%) surveyed intend to take into account that different employees at different stages in their lives attach different value to pensions.

Marc Hommel, partner and UK pensions leader, PricewaterhouseCoopers LLP, commented: 

“There is no point in a business spending large amount on generous pension arrangements that are undervalued by employees. Many employers are thinking very hard about how much money they can and want to spend on pension provision, and how this money is best spent. We are seeing far more imagination in the type of pension arrangements being offered and the vehicles being used to deliver these.”

ENDS



For more information contact:

Lydia Ruffles
Financial Services, PR Manager, PwC 
Tel:+44 (0)20 7212 1798 
Mobile:07966 319 780 
 

Marc Hommel
Partner, PricewaterhouseCoopers LLP 
Tel:+44 (0)20 7804 6936 
Mobile:+44 (0)7801 767373 

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