Firms 'considering reducing pension benefits'

Companies are considering reducing the benefits offered in their pension schemes in order to mitigate the affect of upcoming rules that will require them to auto-enrol millions of extra employees into pension plans.

This is according to new research from the Association of Consulting Actuaries (ACA), which found that 41% of firms surveyed are considering making such a move.

The findings showed that while three-quarters of employers back the auto-enrolment of personnel into pension schemes in principle, 70% think the regulations surrounding the process are complicated.

And 75% of enterprises also said that they feel the new rules that mean employees with less than three months of service have to be enrolled are wrong.

The changes are due to come into force from 2012, and the ACA has urged the coalition government to simplify the auto-enrolment process in response to the findings.

Earlier this month, pensions expert Dr Ros Altman said that the revised method may have a negative impact on the pensions system.