UK - Nearly three quarters (73%) of defined benefit schemes do not expect to be fully funded in five years time, although the figure falls sharply to 16% over ten years, a survey by the NAPF has found.
Other key findings of the survey included the fact one third of private sector DB schemes were still open to new employees, while more than half of people saving in private sector DB schemes today belong to schemes that are still open to new members.
Looking forward to the arrival of Personal Accounts in 2012, the survey also highlighted how inertia had increased the importance of the default scheme.
A massive 94% of people left their money in the default fund despite the fact more investment options are being brought to the market, and NAPF CEO Joanne Segars said:
“The amount of investment choice available in Personal Accounts will need careful consideration. There is every reason to expect most people to stay in the default fund, so it will need to be very carefully designed by experts.”
In this week's Pensions Buzz survey, we want to know whether or not you agree with Lord Myners' opinion that asset owners, such as pension funds, are substantially to blame for short-termism in business.
The combined funding level decreased by just over four percentage points by the end of last month to 93.6%, according to the Pension Protection Fund's (PPF) latest update.
Plastics manufacturer Carclo has missed yet another dividend as it continues to battle its defined benefit (DB) pension funding shortfall.