Companies plan to close pension schemes in favour of personal accounts

At least 300,000 UK employees will be deprived of their existing pension scheme benefits when the government introduces its new personal accounts in 2012, research has suggested.

A survey of 100 finance directors by financial services firm Fidelity International revealed 7% would close their existing pension schemes when the new saving schemes come into effect.

With an estimated 4.4 million private sector pension scheme members, Fidelity said this meant 300,000 losing their current occupational pensions.

Simon Fraser, president of Fidelity’s investment solutions group, said: “The government’s original intention for personal accounts was to complement rather then compete with existing provision, but our findings reveal that this will not be the case.”

A further 11% of respondents said they would keep all existing employees in the company scheme, with new joiners only offered personal accounts – with lower contribution rates.

Separately, the Pension Protection Fund (PPF) revealed that 41 pension schemes whose sponsoring employers had gone bust had transferred into the the fund. This means more than 12,100 people would receive compensation either now or in the future.

The PPF said it was paying out £1.4m a month in compensation to members who had already retired.

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