UK - Employers with defined benefit pension schemes contributed on average 19% of pensionable wage to their schemes in a bid to reduce deficits, compared to an average of just 6% from employers sponsoring defined contribution schemes.
According to the National Association of Pension Funds’ annual survey 2005, 53% of respondents increased employer or member contributions to their pension schemes, or made one-off contributions in the past 12 months.
Some 57% of private sector DB schemes are now closed to new employees, however the number of closures of DB schemes remained roughly unchanged from 2004, suggesting most employers who were goint to take this action have already done so.
Deficits, Pension Protection Fund levies, regulations and operating costs topped the list of concerns by pension providers with 80 repondents or 24% expecting to close their scheme to new entrants and/or future accruals in the next five years in the face of these pressures.
Commenting on the findings, NAPF chair Christine Farnish said: “The last year has seen another hefty chunk of regulation and cost piled on to [employers]. Britain’s workplace pension schemes need better, not more regulation. Our hope is that the Pensions Commission will produce a blueprint for radical long term reform of Britain’s creaking pensions system and that government will act to create a climate in which workplace pensions can thrive once more.”
Speaking at the NAPF’s autumn conference, Stephen Timms, minister for pensions, said the government would work towards simplifying regulation and reducing the administrative burden on employers.
He also criticised the EU Commission for adding to the regulatory burden.
“Brussels accounts for a large proportion of the regulation,” he said. “We need proper and rigorous impact assessments to make sure we are not gold-plating arrangements unless there is a very good case for doing so.”
The NAPF survey also found 110 private sector respondents, or 44% of those who run DB schemes, expected to take some action to reduce costs during the next five years.
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.