Key determinants of small companies' pension scheme adoption

Abstract

PurposeThe aim of this paper is to provide a better understanding of the motivating and hindering factors to setting up sponsored occupational pension schemes in small companies.Design/methodology/approachThe study is conducted in two stages: the first stage is a qualitative study consisting of eight focus groups and the second stage is a quantitative investigation comprising a postal survey of 108 respondents. The themes that guided the focus groups were developed through a review of existing literature. Those that informed the survey design emerged from the focus group findings.FindingsThe findings suggest that the decision to adopt a pension although triggered by a number of factors cannot be divorced from the context of operation of the firm, the market environment, the stage of the company's life cycle, and the general economic conditions. The other important contextual issue that influences the decision is the management's future objectives for the firm and the management style of the owner or owners.Research limitations/implicationsThe limitations of this study are the over representation of certain industrial sectors in the sample from which the focus groups were formed, and the rate of response (38.6 per cent) to the survey.Originality/valueThe paper provides useful information on the factors affecting the setting up sponsored occupational pension schemes in small companies.