Pension handout spurned

Five years after the launch of the EasyBuild stakeholder pension scheme, tens of thousands of workers are still spurning a potential £500-a-year free handout from employers. And barely more than one-in-ten policyholders is putting their own money into the scheme.

Under the current Construction Industry Joint Council (CIJC) agreement, operatives who pay a maximum £10 per week into the pension scheme are entitled to a matching £10 contribution from their employer.

But Brian Griffiths, chief executive of the B&CE company operating EasyBuild, confirmed that “very few” operatives are making and receiving the maximum contribution.

Griffiths told CJ that at the beginning of February there were 194,761 active policyholders in EasyBuild. And just 28,258 of these, or 15%, were making any contributions of their own.

The rest are receiving the minimum £2.50 employer input – leaving them nearly £400-a-year short of the potential maximum employer contribution.

Griffiths added that, if an individual and their employer had contributed fully to the pension scheme since its inception in April 2001, then the employer would have paid in £1,747 by the end of last year and the operative would have contributed £1,557. Tax relief would have added £440, making a total contribution of £3,744.

Investment growth over the period meant the policy would have units to a total value of £4,854.

“That spells a 30% return on the investment,” commented Bob Blackman, TGWU national secretary. “It’s a lot better than putting your money in a building society.”

Griffiths said only two-thirds of those operatives making their own contributions are receiving the matching employer funding required under the CIJC national agreement. “Our evidence suggests that operatives are far more likely to contribute to a pension if they have a supportive employer who will match their contributions,” he declared.

Excessive bureaucracy and paperwork have been identified as one of the major impediments to the progress of construction’s EasyBuild pension. Last year a member of the B&CE staff was seconded to the Department for Work and Pensions to work on a number of projects, including automatic enrolment into EasyBuild with workers being required formally to opt out of the pension scheme rather than opt in.

The results of an automatic enrolment pilot with three major contractors will be revealed later this year.

Meanwhile, boosting EasyBuild will be a central objective of the CIJC unions in this year’s pay negotiations.