Final salary pensions continue to be closed to new members

Just one in six final salary pension schemes remains open to new members, according to figures released today.

HR advice firm Aon Consulting spoke to 100 defined benefit retirement fund chiefs and discovered that the trend for closing the door to new members had continued.

Just 17% remained open according to its 2008 Employer Survey – down from 28% a year ago, and roughly 50% in 2003.

Factors causing final salary schemes to close to new members included tighter pension regulations, volatile stock market conditions, predictions of people living longer, and fears over future developments in pensions accounting rules.

However, eight in 10 defined benefit schemes were continuing to allow existing members to accrue pension contributions. Employers said the chief reason for doing this was to retain employees.

June Grant, principal at Aon Consulting, said: “With the number of final salary schemes plunging to a record low, they have now become gold dust for the employees who still have them.

“Employers can turn this to their advantage, because the schemes give them a competitive edge in the fight to attract and retain talent.”

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