UK - Outgoing NAPF chairman Peter Thompson blasted governments past and present for a succession of policies which have left DB schemes too expensive to keep open.
In last week’s NAPF conference opening address, Thompson told delegates it was “blindingly obvious” that policies such as contracting-out rebates, the scrapping of ACT relief and the introduction of the limited price increase in 1995 are to blame for DB closures.
And combined with tumbling stock markets, he said, it was unsurprising that many employers have been “voting with their feet” and shutting their schemes to new members.
Thompson also urged the government to take action on scheme wind-ups and change the priority order so that when a scheme is shut, the pain is distributed more evenly and not left entirely with active workers.
He said: “Surely it’s not right that a 63-year-old retired person receives a full pension while active members of the same age would lose out?”
Thompson’s blast came as the NAPF released figures indicating that four out of 10 firms operating a DB scheme had closed it to new members within the last 12 months.
The survey – which covered 255 UK companies across different sectors and scheme sizes – also found that less than one in five employers are now offering a DB scheme to new employees.
Further still, one third of companies surveyed planned to review their DB pension scheme within the next 12 months.
NAPF chief executive Christine Farnish said: “Traditional final salary pensions have undoubtedly become highly expensive to provide, not just because of the current economic climate.”
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