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Building Industry Finance, Law and Insurance
News Release from: Bibby Financial Services | Subject: Compulsory pension contribution
Edited by the Buildingtalk Editorial
Team on 14 March 2006
Crippling compulsory pension
contributions
Bibby Financial Services research reveals many businesses would see a significant dip in profits if the Turner Report's compulsory pension contribution were to come in to force.
Almost half (48%) the UK's small and medium-sized manufacturing businesses would see a significant dip in profits if the Turner Report's compulsory pension contribution were to come in to force, research from specialist cash flow provider Bibby Financial Services has revealed Under the Government's proposed National Pension Savings Scheme (NPSS), businesses without their own contributory scheme in place - which accounts for half (51%) the small manufacturers in the UK - would have to enrol all employees on the NPSS and make a compulsory 3% contribution to each individual's pension fund
This article was originally published on Buildingtalk on 6 Apr 2005 at 8.00am (UK)
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In addition to the 48% of small manufacturers concerned about the effect on their bottom line, over a third (38%) said the compulsory contribution would hinder their expansion plans, while 44% would rein back further investment in business growth.
The introduction of the NPSS would also directly impact on employees as 44% of business owners and managers in the manufacturing sector would revise their pay review policies, 41% would slow down their recruitment drive and over a quarter (26%) would cut back on existing staff benefits in order to recoup the cost of the new scheme.
"With Lord Turner himself admitting that the NPSS would cause operating costs to rise by 1% for small and medium-sized enterprises compared to 0.4% for larger organisations, the Government clearly needs to reconsider its plans and consider the impact the 3% contribution will have on the UK's small business community", said David Robertson, chief executive of Bibby Financial Services.
"Small business owners and managers in the manufacturing sector make a significant contribution to the economy and any demise in their prosperity could have a serious knock-on effect across a wide range of industry," Robertson added.
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