GlaxoSmithKline has become the first FTSE 100 company to offer employees a group option for self invested personal pensions (Sipps) - a move likely to be followed by many other big blue-chips.
The pharmaceutical giant's decision gives workers the chance to invest their pension pot in a wide variety of assets ranging from commercial property and overseas shares to more exotic classes such as listed hedge funds.
Following the pensions simplification changes in 2006, those already in employer-sponsored pension schemes can now also contribute to a Sipp.
The GSK scheme, offered through Legal & General, is designed to sit alongside existing pension plans but offer a tax advantage for share scheme members, who can transfer their maturing shares into a registered pension. L&G says 19,000 employees will be able to take advantage in 2008.
Scheme members will be given access to a wider variety of investment options and will be able to decide for themselves how actively they wish to be involved in the investment decisions for their retirement pot.
A poll by the National Association of Pension Funds released on Friday found the majority of workers still look to their employers for advice on how much to save and where to invest their pensions. Concerns have been raised that allowing employees access to non-insured assets through a Sipp could cause problems. The details of what advice would be given to staff and how this was funded was likely to differ between schemes, said John Moret at Suffolk Life.
Sipp providers such as Hargreaves Lansdown and Standard Life say group Sipps are the future for pension savings. Both are in discussions with FTSE 100 companies about providing schemes. The director of L&G has said that by 2012, half of all FTSE 100 companies could have a group Sipp option in place.
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