PP100 survey predicts 'new wave' of closures to existing members - EXCLUSIVE

An exclusive survey of 100 senior scheme managers by Professional Pensions showed that 96% believed more schemes would close to existing members. Only 4% believed this would not be the case.

One manager said he believed there would be additional closures - but believed many firms would wait until 2012 before making changes.

Another added: "Unless the government makes big legislative changes on issues such as unconditional revaluation of deferreds and section 75 debts, many employers will see the scary FRS17 figures based on low bond yields and will decide to close their schemes to all accrual.

He added: "Without radical changes, DB in the private sector is now doomed."

This comes after Fujitsu Services, Barclays and Morrisons announced plans to close their final salary schemes to future accruals.

Fujitsu began a consultation about proposals to freeze its scheme in May (PP Online, May 15).

Barclays proposed that benefits relating to future service by existing members of the Barclays UK Retirement Fund - which was closed to new members in 1997 - would be provided by the cheaper hybrid cash balance pension scheme, Afterwork, it currently offers new staff (PP Online, June 3).

Morrisons said it would move all future benefit accrual onto a career average basis (PP Online, June 5).

These findings come as PricewaterhouseCoopers research also revealed some 96% of companies were planning changes to their workplace pension schemes (PP Online, June 25).

The survey of 157 schemes - including 33 from the FTSE100 - found concerns about risk, the need to reduce cost and the Chancellor's 2009 budget were key reasons behind the need for change.

It said 77% of respondents said the Budget's pensions tax proposals have further reduced their motivation to provide workplace pensions, whether defined benefit or defined contribution.

And it revealed 74% of firms were considering ceasing all future accrual for existing employees.

It additionally found 41% of smaller employers and 25% of larger employers intend to offer the bare minimum under auto-enrolment from 2012.