More than 10 million people are members of company (or occupational) pension schemes. Companies are not obliged to set up their own schemes. But a good one can be a selling point in attracting and retaining the best employees.

Big changes in pension provision have taken place, with the introduction of stakeholder pensions and replacement of the State Earnings Related Pension Scheme (SERPS) with the State Second Pension. Some companies have been cutting pension costs by offering stakeholder pensions, rather than membership of existing schemes, or even abandoning final salary schemes in favour of money purchase schemes.

The government intends to encourage company schemes as the best way of providing pensions for employees. But changes in legislation, as well as demographics, mean that company pensions are expensive to provide.

This briefing explains:

• The different options.
• The costs to an employer.
• Where to get help.

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