UK - The number of senior executives offered money purchase pensions has risen from 5% to 40% in the past four years, a study by Lane Clark & Peacock reveals.
And the consulting actuary’s survey shows that a third of companies which currently offer final salary pensions say they will offer a different form of pension to any new directors they hire.
It said this would either be a money purchase pension or a salary supplement instead of any pension at all.
LCP’s study also shows the average company contribution to money purchase arrangements is just under 20% of pensionable salary compared to 43% for final salary arrangements.
LCP partner Mark Jackson said: “While the vast majority of directors still receive excellent – normally final salary – pensions, that position is changing rapidly, with more companies either moving their directors to money purchase arrangements or not offering pensions at all.”
He added: “The government’s dramatic proposals for changes to the tax regime will accelerate the trend to simpler, more flexible, cost-transparent compensation packages for directors that may exclude pensions entirely.”
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