25 March 2004 - Publication of DWP research report 207 Employers’ Pension Provision Survey 2003
This report presents the findings of the Employers’ Pension Provision survey 2003. The survey is the fifth of its kind, with the previous survey being conducted in 2000.
In the course of the survey, a representative sample of 2002 private-sector employers in Great Britain was interviewed by telephone about their provision, or non-provision, of pension schemes and any changes they might have recently made to these provisions.
The key findings were:
Almost two-thirds of private-sector businesses were small organisations with four or fewer employees. However, these small businesses accounted for only nine per cent of all private-sector employees, whereas 42 per cent of employees were working in organisations with 1000 or more employees. These larger organisations, in turn, made up less than one per cent of all organisations.
Findings at the level of employer were:
- Overall, 52 per cent of organisations provided some type of pension or pension access
- 7 per cent provided occupational pension schemes (three per cent among businesses with less than five employees, rising up to 85 per cent in organisations with 1000 or more employees)
- 35 per cent of employers provided access to Stakeholder Pensions (SHP), the single most frequent type of provision. However, three-quarters of these organisations reported no active members of SHPs among their workforce
- 12 per cent offered Group Personal Pension (GPP) schemes
- 15 per cent contributed to employees’ personal pensions (PP) plans (that is personal plans other than stakeholders and GPPs)
Findings at the level of the employee were:
- 92 per cent of employees worked in organisations with some form of pension provision
- 32 per cent work for an employer with an open salary related and 21 per cent with an open money purchase scheme
The key changes since the 2000 survey were:
The period between 2000 and 2003 recorded a substantial increase in the proportion of employers offering some form of pension provision, among:
- smaller organisations (with up to 19 employees), the proportion offering some type of pension increased from 26 per cent to 47 per cent
- larger organisations (20 or more employees), the proportion increased from 64 per cent to 98 per cent
The proportion of employees working for a company making some form of provision increased among:
- smaller organisations (with up to 19 employees) from 30 per cent in 2000 to 64 per cent in 2003
- larger organisations (20 or more employees) from 89 per cent to 100 per cent in larger organisations
The proportion of the workforce who were active members of pension schemes among:
- smaller organisations (with up to 19 employees) increased (from 15 per cent to 17 per cent)
- larger organisations (20 or more employees) decreased slightly (from 45 per cent to 44 per cent)
These changes are NOT statistically significant.
Regarding occupational schemes between 2000 and 2003:
- There was an increase in the proportion of organisations with closed occupational schemes (from 5 per cent to 8 per cent among those companies with 20 or more employees)
- Active membership of occupational schemes declined among larger businesses (20 or more employees) from 33 per cent to 31 per cent of the workforce (this is not a statistically significant fall) and remained unchanged among smaller organisations (3 per cent)
- There was a decrease in the proportion of organisations with open salary-related occupational pension schemes (from 11 per cent to 8 per cent)
- Active membership of open salary-related schemes in larger organisations (20 or more employees) declined substantially from 24 per cent of the workforce in 2000 to 16 per cent in 2003
- Reasons given for closing salary-related schemes were mainly “too expensive to run” and “only intended for 1 or 2 directors/one person”
- The provision of open money-purchase occupational schemes increased slightly from 8 per cent of employers to 9 per cent (organisations with 20+ employees), between 2000 and 2003 (not statistically significant)
- The total provision of money-purchase schemes (i.e. open closed or frozen) increased from 9 per cent to 15 per cent and active membership remained at 6 per cent of the workforce compared with 2000
- The intention to limit access to a few selected individuals was also the main reason for closing money-purchase schemes, but costs were rarely mentioned.
Notes for editors
- ‘Employers Pension Provision Survey 2003’ by Andreas Cebulla and Sandra De-Beaman at Centre for Research on Social Policy. The survey design and fieldwork was undertaken by Sarah Wands, Catherine Grant and Keith Bolling at BMRB.
- The survey was undertaken with 2002 private sector employers, randomly selected to be representative in terms of size and sector. Results are then weighted to reflect the true population of GB companies as per the Inter- Departmental Business Register held at ONS (which also acts as the source of the sample). The survey achieved an effective response rate of 67 per cent.
- DWP Research Report No. 207 is published on 25th March 2004. A summary and copy of the report are available on the DWP website at: http: //www.dwp.gov.uk/asd/asd5
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