UK - Over half of all final salary pension schemes are now closed to new entrants or frozen, a study by the Association of Consulting Actuaries reveals.
The association’s 2002 Pension Trends Survey also shows that nearly a third of employers are currently reviewing their pension schemes.
It finds 42% are trying to reduce spending on pensions while 51% are also looking to reduce forward pension liabilities.
The findings coincide with a separate paper from the ACA – Pensions Strategy – which calls on the government to address the problems faced by final salary schemes by improving tax incentives for employers.
ACA chairman Gordon Pollock said: “We hope the government recognises the gravity of the current situation and that decisive early actions are needed.”
The ACA paper also proposes raising the state pension age and abolishing contracting-out.
The paper says: “Contracting-out was successful in the past when the terms provided genuine incentives to replace the second tier of state benefits with alternative forms of pension provision.
“This is no longer the case and, for many employers, contracting-out does not represent an attractive option.”
Other key recommendations are that employers should be encouraged rather than forced to provide sponsored schemes and that the government should end inequity between pensioners and active scheme members when a scheme is wound up.
A number of pension schemes have been prompted to lock in gains with a move into bonds after the estimated deficit across FTSE 100 DB pension schemes improved by £36bn, over the 12 months ending 30 June last year, JLT Employment Benefits found.
HM Treasury has agreed in principle to give NEST a £329m contingent liability guarantee in the event of the master trust's wind up or closure.
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