UK - Final salary scheme closures are continuing at record levels, latest OPRA figures reveal.
The statistics – which confirm the industry’s worst nightmares – show that 1072 company schemes either closed to new members or new accruals between April 1, 2002, and March 19 this year.
This compares to 1093 in the year to March 31, 2002.
But OPRA warns that these figures could be just the tip of the iceberg.
An OPRA spokesman explained: “Trustees are supposed to let us know of any changes in the status of a scheme within 12 months.
“However, there is no sanction if they don’t notify us – and many trustees don’t meet this deadline.”
OPRA also revealed the total number of occupational schemes in the UK has plummeted from 118,651 on March 31, 2000, to 94,030 at November 29, 2002 – a fall of 20.8%.
While many of the schemes being closed are very small – between 2-11 members in size – the research also shows that the number of large schemes open to new members is dropping dramatically, too.
Society of Pensions Consultants secretary John Mortimer said: “There are a number of factors which are causing schemes to close: the increase in costs due to falling investment returns; increased longevity; tax changes; and changes in the benefits that schemes are required to provide, such as limited price indexation.
“Unless some of those factors are either changed or addressed there is a real risk this trend will continue.”
The OPRA figures follow the Association of Consulting Actuaries’ predictions of a complete meltdown of pensions provision in the next two years.
The ACA claims that less than 15% of final salary schemes will be open to new members unless action is taken.
This week's top stories included Cardano announcing plans to acquire Now Pensions from a Dutch pension fund later this year.
Royal Bank of Scotland (RBS) faces a £102m impact on liabilities as a result of equalising guaranteed minimum pensions (GMPs), according to its annual results.
Malcolm Mclean says getting the channels of communication right and engaging more openly is a good starting point