Almost half (47%) of senior executives at companies with a turnover of more than £1 million are not prepared for the introduction of pension tax simplification or ‘A-Day’ next April, according to research from Prudential.

Only 14% claim to be fully ready for what many are calling the most radical overhaul of pensions since 1908.

Staggeringly, 13% of company bosses say they simply don’t know if they are prepared for A-Day or not.

The manufacturing industry claim to be the most prepared for these changes, with 17% of company bosses saying they are very prepared, whereas in the service sector only 11% admit to being prepared.

The findings reveal that an alarming 62% of these company executives have ‘little or no understanding at all’ of the new pensions changes, let alone the implications for their employees. Just 8% of senior management has a ‘very strong understanding’ of the pension changes ahead.

The new rules - aimed to simplify company pension schemes - will be introduced on 6th April 2006. The aim of the legislation is two-fold; to simplify the pensions system and to encourage greater pension investment.

A-Day red faces

Dave Harris, corporate pensions director, Prudential UK said: "Too many company executives are unaware of the minefield of changes awaiting them post A-Day."

"Unless they wake up to these now they could find themselves under increasing pressure from disgruntled staff faced with the prospect of losing superior pension benefits."

"For instance, scheme rules will normally need to be altered before higher tax-free cash can be paid or before the trustees can agree to something allowed in new legislation, but not in the current scheme rules."

The period ahead of A-Day should provide companies with a clear opportunity to review their pension offering. But it could end up costing business dearly if they don’t get it right for their employees.

"Employers have a moral obligation to work with their employee benefit consultants to ensure they have communications planned to make employees aware of the changes afoot. Simply hoping A-Day will pass your company and employees by untouched is not an option," said Harris.