More businesses hit by the coronavirus crisis will attempt to save costs by coaxing staff to quit their company pension scheme, the pensions ombudsman has warned.
It is illegal for companies to encourage or induce employees to opt out of a workplace retirement plan once they have been enrolled.
Once out of a scheme, employers are not required to make contributions to an employee’s pension of at least 3 per cent of their pensionable pay.
Antony Arter, the pensions ombudsman, told MPs on Wednesday that he expected the Covid-19 crisis will lead to more employers trying to persuade staff to quit their pensions.
“There will be a lot of small employers who will turn to their employees and try and encourage them to opt out of automatic enrolment,” Mr Arter told the work and pensions select committee.
Mr Arter, whose office settles disputes between pension schemes and their members, said