UK - Nearly half of small and medium-sized companies believe their pension schemes are in deficit, a survey from Hazell Carr shows.
The consultant’s report – SMEs and Pensions: Which way now? – reveals 47% of firms have closed their DB schemes to new members. And 17% of SMEs with open schemes plan to close them in the next year.
The survey also shows that 42% of firms with open schemes say they have not received any advice from their actuaries about whether they should close or wind them up.
Hazell Carr director Michael Rudge said: “Given the severity of this situation it is of concern that nearly half of the companies surveyed have received no advice on the options surrounding the final salary scheme.”
Despite the level of closures, 80% of employers think their staff understand the value of benefits in the scheme and 94% of companies with a scheme still open believe it to be a material aid to recruitment and retention.
Firms surveyed say that they would close their scheme rather than wind it up, which would prove prohibitively expensive for many firms. Only 22% believe their scheme had sufficient assets to buy out deferred benefits in full.
Hazell Carr calculated that the average scheme deficit among the companies it surveyed was around £5.9m – meaning the total pensions deficit among small and medium-sized companies will run to many billions of pounds.
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