Employers' contributions to pension schemes have risen by 25% during the past two years, according to research published on Monday.

PENSIONS IN CRISIS

75% of final salary schemes will close within five years (Hermes) Only a fifth of people under 34 are concerned about their future retirement (Mercer) People from ethnic minorities are at higher risk of pensioner poverty (Pensions Minister)

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And in the past year they increased to £6bn from £5.3bn, the survey of 339 schemes suggested.

Incomes Data Services said its study showed the "vast scale" of company money flowing into pension schemes.

However, IDS says the rise is nothing to do with generosity on the part of the companies concerned.

Instead, it reflects the way many companies took £18bn in "pension holidays" during the 1990s boom, using the rising price of investments to justify halting their contributions or even taking money out of their funds.

More than a quarter of the total payout in the 24 months under review was for "special contributions", to make up for shortfalls and to cover early retirement and other contingencies.

Those "special contributions" account for more than the total rise in overall contributions.

Radical action

The survey also highlights the fact that one out of every 10 schemes receive no employer contributions at all.

Pensions have become a major concern of trade unions following the closure of many schemes that guaranteed employees a fixed proportion of their final salaries on retirement.

And Britain's biggest manufacturing union, Amicus, is holding a conference in March to press for better schemes.

Joint general secretary Derek Simpson said: "Employers have a moral obligation, as do employees, to make provision for retirement income.

Pensions minister Andrew Smith has said the government will consider "radical and concerted action" to shore up final salary pension schemes.

But Mr Simpson said: "The government must legislate to make this happen.

"The consequences of not doing so will be disastrous for individuals and the economy."