FOCUS ON PENSIONS
Page 27
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All employees must make approved employee-pension plans — or enter the State reserve scheme
by John Darker
DESPITE the generally high take-home pay of lorry drivers there is reason to believe that very few have so far made any adequate provision for retirement pensions. Though many thousands of drivers earn an annual income comparable with or even exceeding some professions it is a brave employer who reminds his workforce that prudence requires a pension contribution of at least five per cent of annual earnings to be set aside.
This means that a £3000 a year (gross) driver would lose another £150 a year from his pay packet after the usual PAYE and National Insurance deductions. Many drivers think they have done well by their families if they have a death benefit insurance policy for £1000, costing a few pounds a year in premiums. Outside the nationalized industries and some of the larger independent road haulage concerns, pensions schemes worth the name are pretty thin on the ground.
Because politicians have realized that workers, in general, will not make sensible provision for their old age — and a highly commercialized society offers constant temptations to spend the "spare" money available after normal household outlays have been accounted for — the Government has enacted a new Social Security Act which provides insurance companies with the prospect of a rich harvest in selling to employers supplementary pensions schemes.
Unfortunately for employers, the tangible benefits to older employees from the State-administered reserve pension scheme will be minimal, and employers who decide to go for a private occupational scheme will not find it very easy to persuade employees of 40 and over that their contributions will yield a worthwhile pension. The hard fact is that a realistic pension can be earned only from a lifetime of contributions. The private occupational schemes may provide some sort of security in old age for the youth of today. The middle-aged family man who has made no provision for his retirement beyond the compulsory State pension contribution may not be readily convinced that a private occupational scheme urged on him by his employer will be worth the monetary sacrifice it entails. Employers may well resent this onerous responsibility but they should remember that a good pension scheme may enable them to attract and retain staff; employers who opt for the State-backed reserve pension scheme may rank as backward employers.