Figures from PwC show 27 per cent of UK businesses are considering setting up a corporate self-invested pension plan both as their main pension arrangement and to enable their employees to roll over maturing shares in company share plans. The research shows 7 per cent have already implemented a corporate Sipp.
PwC says corporate Sipps have proved attractive to employers because members can be offered greater investment flexibility than through traditional defined contribution plans, including the ability to invest in shares of their employer and receive assets in specie from company share plans, incentive plans and other pension arrangements.
The research also found 83 per cent of employers surveyed were concerned about lack of value for the money they are spending on pensions provision. To address this, 45 per cent said they 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 at PwC, says: “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.
“There is no point in a business spending large amounts 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.”