UK - The number of schemes closed to existing members will double over the next year, Hewitt Associates warned.
The consultant's research showed nearly 20% of the 154 schemes it surveyed had now closed to defined benefit accrual - with a potential doubling of that figure expected over the coming year.
Hewitt managing principal Jackie Daldorph said: "The vast majority of pension schemes have now closed to new entrants, but the pace of closure to existing members is accelerating, with the number of ‘frozen plans' expected to double in the next 12 months.
"For companies now embarking on a plan freeze, the issue becomes how to do so, while still keeping the members, their unions, and trustee boards onside."
Despite this, Hewitt said freezing schemes by closing them to future accrual of defined benefits was only one of a number of ways schemes were looking to change benefits.
Other means being considered by companies in the survey included retaining a final salary scheme but capping growth in pensionable pay or moving to a career average (CARE) scheme.
Hewitt also cautioned schemes to proceed with caution when closing schemes to future accrual - urging them to both have a well-planned strategy in place and avoid the temptation to try to short-cut the process of consultation with trustees, members and unions on the changes.
Principal consultant Tony Baily explained: "There are often good reasons for freezing plans. However, the recent wave of plan freezes potentially puts pressure on other companies simply to follow suit - without really understanding whether this best meets their business objectives and constraints.
"For some companies the driving factor to freeze is to achieve equality of terms between DB and defined contribution members; for others it might be one of risk management. Whatever the reason, it is important to have a solid business case to help the workforce or trustee board understand the reasons for change."
Baily added: "Our survey shows that while many plans are being frozen, employers have not altogether ruled out DB. Employers can often achieve significant risk and deficit reductions through alternative measures to simply moving to a DC scheme. This may involve retaining a final salary scheme but capping growth in pensionable pay, or moving to a career average approach.
"In some cases, this kind of approach may also be better received than freezing the plan."
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