Its survey reveals that 16% of companies with an annual turnover of at least £1 million who between them have some 1.28 million employees, are ignoring pension rules forcing their staff to miss out on potential retirement benefits.
AXA's survey of 400 medium to large companies across the UK revealed that 25% of companies employing between 11 and 25 people said that they did not have a pension scheme. The figure dropped to 12% for companies employing between 26 and 100 staff and 5% for those with over 101 employees.
All companies employing over five staff are required by law to provide a pension scheme for staff.
Steve Folkard, Head of Pensions Marketing at AXA said:
"This is a major issue requiring urgent action. It seems that companies of all sizes are unaware of their legal responsibility to provide access to a pension scheme for their staff.
"Current pensions law can be bewildering so businesses need expert advice. At AXA we have the experience, expertise and solutions for IFAs to rely on when advising employers who may be confused about their responsibilities."
Of those companies that provide pension schemes, 78% have less than 100 members. Moreover, 71% of firms offer a defined contribution system whilst only 20% have a defined benefit (final salary) scheme in place. Some of the companies surveyed were running both schemes.
On the question of whether employers planned to increase pension contributions, 16% said they would whilst 3% admitted they plan to reduce them.
When companies were asked whether they would change their scheme retirement age to match a possible increase in the State retirement age, to 70 for example, they were equally split between those who would and those who wouldn't change their scheme's retirement age.
Steve Folkard continued:
"Although the survey has some positive findings, the overall impression is that for many companies pensions are not a high priority. Many firms don't appear to be aware of basic information such as administration costs and contribution levels are often very low. It is not surprising therefore that, relatively few companies are looking to increase contributions in the future.
"The bottom line is that there is a big job for advisers to help their corporate clients and to market their services and the pension scheme to employees. This will raise general awareness of retirement planning."
