UK - Millions of final salary scheme members may need to increase contributions by £1bn a year to plug scheme deficits, Aon Consulting warns.
Its research shows average rises at firms which have increased member contributions is now nearly 7% compared with 5% two years ago.
Head of research Simon Martin said: “This is hard evidence that employees face a clear choice if they are to retire on an adequate pension.
“Either they will need to work longer or start paying more into their pensions now.”
Martin said that while a £1bn increase in contributions – equivalent to an extra 1% of employee earnings – might seem high, it needed to be compared with the threefold increase in employer-funded contributions imposed by successive governments since 1978.
And he added that a far greater danger was that changes in winding-up requirements announced by the department for work and pensions last month could make final salary schemes so expensive that no increase in member contribution would be enough to safeguard their existence.
Martin pointed out that many employers were looking to restructure employment contracts to water down their pensions promises and save on costs.
“We are already seeing the first signs of a movement away from early retirement as pension schemes find that they cannot meet the cost,” he said.
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