UK - Closure costs are forcing many smaller companies to keep their defined benefit schemes open, law firm Reynolds Porter Chamberlain claims.
It said smaller firms had less flexibility to handle the disruption to cash flow and the legal and actuarial due diligence needed to close a scheme.
It also pointed out that with many schemes in deficit, companies lacked the spare cash to pay enhanced transfer values and accrued entitlements to members.
RPC partner Jonathan Davies said: “To meet these requirements, employers purchase expensive deferred annuities to protect the pension rights of existing members.
“The alternative is to offer enhanced transfer values into a DC scheme to encourage employees voluntarily to give up existing rights.”
This week's edition of Professional Pensions is out now.
Ben Gunnee reflects on 2018 and talks about the Fiduciary Management trends to keep an eye on in 2019
Lloyds Banking Group secured 630,000 new pension customers last year, according to its 2018 annual results.
Guy Opperman has rejected calls to speed up changes to auto-enrolment (AE) despite increasing pressure to boost contribution rates and overall savings pots.