Only 36% of Construction Workers Pay Into a Pension

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• Only 36% of Construction Workers Pay Into a Pension

14 May 2021

Department for Work and Pensions figures show that only 797,000 employees out of a total industry workforce of 2.2 million were paying into any kind of pension.

The Building Engineering Services Association (BESA), the UK’s leading trade organisation for building engineering services contractors, feels that workers need more protection from poverty in retirement.

The figures, sourced by the union Unite, do not include the tens of thousands of self-employed workers used by construction firms, whose pension participation is believed to be even lower.

Unite National Officer for Construction Jerry Swain said this would result in a “destitute generation of future pensioners”.

Contractual Pensions Encouraged by BESA

BESA said many should already have pension rights locked into their working conditions and urged employers to take advantage of a working agreement that has had contractual pension provisions at the heart of its wider benefits package for more than a decade.

The National Wage Agreement means that all operatives, including apprentices, have the right to participate in an employers’ contributory pension scheme. As part of a worker’s terms and conditions, employers contribute a minimum of 5 per cent of basic earnings into a qualifying scheme. 

National Wage Agreement

The agreement is negotiated between BESA, on behalf of employers, and Unite, representing the workforce and both parties were congratulated for their “forward thinking approach” when the pension element was added in 2010.

It was set up as part of the terms of negotiated wage settlements before auto-enrolment legislation made contributory pensions a legal requirement for employers.

“The National Agreement has always been, and remains, ahead of the curve as far as pensions are concerned,” said BESA’s Head of Employment Affairs Paula Samuels. 

“Through these contractual pension arrangements, employers continue to demonstrate a long-term commitment to making sure operatives are catered for beyond the lifetime of the employment relationship.”

Rewarding Skilled Operatives

BESA added that providing a benefits package was an important part of a wider investment by employers in creating a high-quality workforce where skilled operatives were properly rewarded for their loyalty and commitment to professional working practices.

“Employers who take advantage of the full range of in-service benefits via the BESA subsidiary Welplan, such as sick pay, death benefit, and disability benefit, show they value their workers and want to provide for them and their families should the worst happen.

“This also gives the employer a competitive advantage because they can offer better terms to skilled workers, who are in higher demand than ever as the industry bounces back from the pandemic,” added Samuels.

Picture: a photograph of a construction worker, wearing a protective hard hat, working on some steel roofing

Article written by Ella Tansley | Published 14 May 2021

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