UK - Government plans to scrap vesting periods could be the "nail in the coffin" for final salary schemes, employers warn.
The Confederation of British Industry says ditching vesting periods – the time between joining a scheme and becoming eligible for deferred benefits – will create an administrative nightmare for providers and could prompt further final salary scheme closures.
Work and pensions secretary Andrew Smith said: “It remains our intention to introduce, as government amendments, measures such as the immediate vesting for short-term workers.”
The Confederation of British Industry said it had “great concerns” about the measure being introduced on an immediate basis.
A spokesman said: “We have great concerns about the reduction in vesting periods because of the administration burden it places on employers with high levels of staff turnover.
“You could find companies – particularly those in the retail sector – having to administer large amounts of very small pensions. It will do nothing to encourage future occupational pension provision.”
Mercer Human Resources Consulting European partner Matthew Demwell agreed and said: “Having it immediate is a pain because you could have people employed for a few days who walk out yet are eligible for a deferred pension.”
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.