UK - Nearly 40% of small to medium-sized final salary schemes are in danger of being closed due to funding fears and regulatory uncertainty, SEI claims.
Research commissioned by the multi-manager found that lack of government action and growing liabilities were a far bigger problem for schemes with assets between £10m-£250m than concerns over the Myners’ review.
The study found that 38 of the 100 companies surveyed were considering closing their DB schemes. But this figure rose to 50% for companies with schemes worth between £10m and £50m.
SEI managing director Patrick Disney said: “This research should serve as a wake-up call to the government, who could be accused of ‘fiddling while Rome burns’.
“While the Myners review was successful in calling into question the present system of decision-making for pension funds it is now time for the government to tackle the pensions issue in its totality and address its systemic problems.”
*Around 40% of firms plan to close their final salary schemes to new employers this year, the Chartered Institute of Personnel and Development says.
But few employers are axing pensions contributions altogether.
The body found that of the 200 companies surveyed, 95% still pay into pension schemes for existing employees and 87% were contributing to new employees’ pensions.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.
Pensions and Benefits UK 2019 is delighted to announce the launch of our programme for this year, celebrating 20 years of bringing you the latest updates on all things pensions and employee benefits. Register for your place today!
PP has compiled a list of what to watch out for over the coming months.
Willis Towers Watson's LifeSight is the first master trust to be granted authorisation by The Pensions Regulator (TPR).