Employees are contributing too little to defined-contribution work pension schemes to support themselves well in retirement, according to a survey by consulting firm Mercer.

Although contribution rates have risen slightly in the past five years, at current levels most employees will get more pension through state benefits than they will from their company pension scheme, Mercer said.

Many people are unaware of how little their occupational scheme will pay them in their retirement, it said.

More than 50 percent of respondents to a survey conducted by Mercer last year said they expected to get a pension of more than half their pay on retirement.

But at the current average contribution rates revealed in its latest survey, the average employee with 30 years' service is more likely to get a pension worth only around 20 to 30 percent of their salary, said Mercer.

Employees are on average contributing a total of 10.4 percent of their salaries to defined-contribution pension schemes, a slight increase from the 9.5 percent in 2002 when Mercer conducted its previous survey.

Of the 10.4 percent, employers contribute an average of 6.8 percent while workers put in an average of 3.6 percent, Mercer said.

If people want a good level of pension they must be looking at a minimum of 15 percent (overall), while somewhere nearer 20 percent would be more sensible, said Tony Pugh, Mercer's UK head of defined-contribution pension services.

There was a growing divide between employees in defined -contribution schemes and those in defined-benefit schemes, said Pugh.

Mercer said 93 percent of the over 400 survey participants now offer only a defined-contribution scheme to people joining their firms, as many firms have shut their more generous defined-benefit schemes.

The average contribution into a good defined-benefit scheme would be 20-25 percent of an employees' salary, Pugh said.

Members of defined-contribution schemes must bear the full risk of not getting as much income as expected from their pension when they retire, while those in defined-benefit schemes receive income guarantees from their employers, Pugh added.

Companies should be more imaginative in trying to encourage workers to put money into defined-contribution schemes to save more for their retirement, Mercer said.

Methods such as automatic scheme entry requiring members to contribute or encouraging workers to divert part of their future pay rises into their pensions can significantly boost their retirement incomes, it said.