UK - Defined benefit (DB) pension schemes operated by small businesses are now virtually extinct with 91% closed to new entrants, an Association of Consulting Actuaries (ACA) survey shows.
It added savings into defined contribution (DC) schemes in the sector are "worryingly" similar to 1996 levels, when the ACA released its smaller firms study.
The ACA predicted pension outcomes for employees in small firms are likely to "worsen significantly" in coming years. And said firms' concerns over the affordability of auto-enrolment threatened existing schemes.
ACA chairman Keith Barton, said: "Pensions in smaller firms are struggling to survive in hostile economic conditions. The majority of DB schemes are in this sector, but the vast majority, 91%, are now closed to new employees and half to future accrual for existing members.
"This can be no surprise, given the significant increases in the cost of running such schemes, courtesy of lower investment returns, increasing life-spans and extra regulatory requirements. However, it is striking that, just 12 years ago, our survey that year found 82% of DB schemes were then still open to new entrants."
Barton said levelling-down of DC provision was "just as worrying".
"We found 30% of 'traditional' trust-based schemes run by smaller firms are now closed, replaced in many cases by more lightly regulated contract-based schemes with lower contributions.
"At a time when contributions into DC schemes need to rise to offset the impact of lower investment returns and longevity improvements, it is dismal news that contributions remain pretty flat."
For firms with 50 or fewer staff combined employer and employee contribution levels currently stand at 8%. Barton said this should be doubled to provide a comfortable retirement.
He said "serious incentives" were needed to encourage higher contribution levels.
The UK's 1.2 million smaller firms employ around 9.6 million people, but more than 1 million of these firms employ 4 or fewer staff. Around 80% of these firms currently offer no workplace pension scheme.
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