Fear of further changes and clarification of the framework governing pensions in the Budget and General Election is causing employers to put off decisions regarding their workplace pension arrangements, says PricewaterhouseCoopers LLP (PwC).

Findings from PwC's forthcoming annual pension survey show that almost half (48 per cent) of organisations are deferring these decisions on alterations to pension provision for higher earners, and 30 per cent are putting intended changes for their wider workforce on hold.

Changes already outlined for pensions include the increase from 50 to 55 in the age at which individuals can retire and withdraw their tax-free cash, and the freezing of the annual and lifetime pension allowances. It is also anticipated that the Government will clarify the way the proposed new tax on employer pension arrangements for higher earners will operate from April 2011, presenting compliance, design and communication challenges.

PwC's partner and pensions leader, Marc Hommel, said: "Employers are reducing overall workplace pension provision due to frustrations about their inability to plan for the long-term due to continuous regulatory and tax changes. Frequent changes have undermined trust in the durability of the legal and tax framework governing pensions and this has dented employers' inclination to support occupational pension plans.

"In the absence of concessions to the higher-earners tax proposals, which we believe will lead to further deterioration of pensions provision for individuals in all earnings brackets and accelerate defined benefit scheme closures, we hope for a quiet Budget in relation to pensions. Employers do recognise the social merit of supporting retirement savings but need stability and consistency in the regulatory framework if they are to be motivated to keep or resurrect good-quality workplace pensions. The need to raise revenue to fix short-term finances must not consume the long-term goal of enabling people to retire with financial security."

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