Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Personnel Today

Register
Log in
Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+

Pay & benefitsPensions

Benefit costs fall as more pension schemes close

by Jo Faragher 11 Feb 2015
by Jo Faragher 11 Feb 2015

The continued closure of final salary pension schemes has led to a drop in benefit costs for employers, new research has found.

According to Towers Watson’s annual Benefits Healthcheck survey, the number of employers spending more than 20% of salary costs on benefits has dropped from one-third in 2014 to a quarter this year.

Benefit costs – XpertHR resources

XpertHR benefits and allowances survey 2014

It also found that, while companies that were still operating defined benefit (DB or final salary) pension schemes still had higher costs than those operating defined contribution schemes, the spending gap has closed over the past year.

This was due to more companies closing final salary schemes, Towers Watson said.

Will Aitken, senior consultant at Towers Watson, said: “There has been a significant reduction in the average cost of benefits as a percentage of salaries, in the past year. This is mostly due to the continued trend in mid-sized companies towards DB pension plan closure and plan design changes.”

“We expect this trend to continue as we get closer to the end of contracting-out, as more DB pension schemes start to redesign ahead of the new legislation.”

Just under one-third (29%) of companies will spend between 11% and 15% on benefits as a proportion of salary costs this year, the research found.

Despite lower costs, however, only a minority of organisations reported they were able to adequately measure the success of their benefit plans.

Furthermore, only around one-third of organisations surveyed said they planned to review and change their existing plans to accommodate different generations in the workforce.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

OptOut
This field is for validation purposes and should be left unchanged.

Aitken added: “The multi-generational nature of many workforces is causing challenges for benefit design, particularly as we see a trend towards people working longer into their 60s and 70s. This can put significant pressure on the cost as well as design of benefits.”

In terms of the role of benefits, the top priority cited by employers was as a means of attracting and retaining staff. It was also important for companies to be seen as competitive in their benefits package compared with their peers.

Jo Faragher

Jo Faragher has been an employment and business journalist for 20 years. She regularly contributes to Personnel Today and writes features for a number of national business and membership magazines. Jo is also the author of 'Good Work, Great Technology', published in 2022 by Clink Street Publishing, charting the relationship between effective workplace technology and productive and happy employees. She won the Willis Towers Watson HR journalist of the year award in 2015 and has been highly commended twice.

previous post
NHS Employers chief: “Workforce supply is the biggest single concern”
next post
First UK tribunal finds worker’s obesity eligible for disability protection

You may also like

Public sector workers gain pay rises of up...

22 May 2025

Next to improve wage-setting transparency after shareholder pressure

16 May 2025

TPT to launch multi-employer CDC pension scheme

12 May 2025

Ofgem workers ballot for strike action

2 May 2025

Millions at risk of retiring under-pensioned

30 Apr 2025

What will reward look like in 2035?

28 Apr 2025

NI increase has not caused ‘knee-jerk reaction’ in...

23 Apr 2025

Post-pandemic starters seek more pay for on-site working

10 Apr 2025

Maisie Adam to host Employee Benefits Awards 2025

3 Apr 2025

Two-thirds of healthcare workers threaten to quit without...

31 Mar 2025

  • 2025 Employee Communications Report PROMOTED | HR and leadership...Read more
  • The Majority of Employees Have Their Eyes on Their Next Move PROMOTED | A staggering 65%...Read more
  • Prioritising performance management: Strategies for success (webinar) WEBINAR | In today’s fast-paced...Read more
  • Self-Leadership: The Key to Successful Organisations PROMOTED | Eletive is helping businesses...Read more
  • Retaining Female Talent: Four Ways to Reduce Workplace Drop Out PROMOTED | International Women’s Day...Read more

Personnel Today Jobs
 

Search Jobs

PERSONNEL TODAY

About us
Contact us
Browse all HR topics
Email newsletters
Content feeds
Cookies policy
Privacy policy
Terms and conditions

JOBS

Personnel Today Jobs
Post a job
Why advertise with us?

EVENTS & PRODUCTS

The Personnel Today Awards
The RAD Awards
Employee Benefits
Forum for Expatriate Management
OHW+
Whatmedia

ADVERTISING & PR

Advertising opportunities
Features list 2025

  • Facebook
  • Twitter
  • Instagram
  • Linkedin


© 2011 - 2025 DVV Media International Ltd

Personnel Today
  • Home
    • All PT content
  • Email sign-up
  • Topics
    • HR Practice
    • Employee relations
    • Learning & training
    • Pay & benefits
    • Wellbeing
    • Recruitment & retention
    • HR strategy
    • HR Tech
    • The HR profession
    • Global
    • All HR topics
  • Legal
    • Case law
    • Commentary
    • Flexible working
    • Legal timetable
    • Maternity & paternity
    • Shared parental leave
    • Redundancy
    • TUPE
    • Disciplinary and grievances
    • Employer’s guides
  • AWARDS
    • Personnel Today Awards
    • The RAD Awards
  • Jobs
    • Find a job
    • Jobs by email
    • Careers advice
    • Post a job
  • Brightmine
    • Learn more
    • Products
    • Free trial
    • Request a quote
  • Webinars
  • Advertise
  • OHW+