UK - Twenty percent of defined benefit (DB) schemes now exclude new members with more closures imminent, according to a new survey from research firms Pension Fund Partnership and MRM Projects.
The survey showed this figure was greater for smaller schemes, with assets up to £50m, at around 33%. During the next year a further 20% of DB schemes are also likely to close, with almost half of smaller pension funds expected to follow.
Over 40% of respondents expressed concern over the cost of running a DB scheme. The survey revealed that employers are paying an average contribution of 14%, a rise of 2% on last year. However, contribution rates for defined contribution (DC) schemes amounted to almost half this level, at just over 7%. According to the survey, over 25% of companies with DB schemes have now established DC schemes for part of their workforce.
Other key findings included :
-71% of respondents felt the main problem facing pension schemes was the complexity of legislation, with 48% of schemes citing the “unpredictability” of government decisions; - over 50% of schemes expressed concern about the introduction of FRS17, with 10% wanting to see the accounting standard amended or abolished;- only 25% of occupational schemes had a funding level of below 100%. This figure was worse for public schemes where the figure was 50%.
The findings were based on a survey of 269 UK pension schemes representing over £230bn in assets and in excess of 4.5 million members.
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