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Only 2% of employers to offer full personal accounts scheme
Personal accounts are likely to be a failure when they are introduced in 2012, with 2 per cent of employers saying they have no plans to offer the full scheme.
A survey on the provision of employer sponsored defined contribution (DC) pensions, conducted by Punter Southall Financial Management, found that around 80 per cent of employers intend to keep their existing pension scheme in place.
However, only 2 per cent said they are planning to offer a pure personal accounts pension scheme.
According to Punter Southall the take up rate of the personal accounts scheme will be far below the economy of scale needed to deliver the proposed low costs.
It also said that such a scenario would make management fees for personal accounts as high as 1 per cent, more expensive than most current defined contribution pension schemes.
The Personal Accounts Delivery Authority (Pada) hit back at the claims and said it never expected large numbers of companies with existing provision to use personal accounts across their workforce.
A spokeswoman for Pada said: "We are designed to complement existing provision. A major part of our customer base will come from employers without existing provision.
"However, the scheme may also be useful for certain groups of workers within larger firms - for example those on short-term contracts or in sectors where there is high turnover of staff."
