UK - Scrapping occupational pensions and giving staff a cash alternative instead is being considered by a growing number of companies, Towers Perrin claims.
The consultant’s survey of more than half the FTSE350 shows that around a quarter of firms say they are considering, or would consider, the cash option.
The survey confirmed that defined contribution schemes had largely replaced final salary provision for new employees – 65% in 2004, compared to 28% in 2002. It also found a 46% increase in the number of defined benefit schemes being closed to existing employees.
Towers Perrin partner Peter Routledge said: “This research proves the next phase of the UK’s migration to DC pensions has begun. Companies have now largely closed DB plans to new entrants but the only way to really tackle pension liabilities is to start to change existing employees’ benefits.
“If stage one was to close pensions to new hires and stage two is to close existing DB to existing employees, we are already seeing evidence that the final stage might simply be to replace corporate pension plans with a cash allowance and let individuals take full responsibility for planning for an income in retirement.”
Hyperbolic discounting and political temptation: Why Brexit-fuelled AE reversal would be a 'monumental' mistake
The home secretary has suggested AE should be scrapped in the event of a no-deal Brexit. Darren Philp explains why this would be misguided
The trustees of the Kodak Pension Plan No.2 (KPP2) have said it will likely enter the Pension Protection Fund (PPF) in "due course" after reviewing the scheme's investment in Kodak Alaris.
A US company has completed a £285m pensioner bulk annuity for around 1,100 of UK members with Legal & General (L&G).
Former BHS chief Dominic Chappell has been accused of trying to rewrite history as he seeks to overturn a conviction for failing to hand over information to the regulator.