Most defined benefit pensions closed to new members

Employers have closed 87% of defined benefit pension schemes to new members and increasing numbers of organisations are also closing the schemes for their existing workforces.

Research conducted by the Association of Consulting Actuaries (ACA) revealed that 18% of defined benefit – usually final salary – schemes no longer take contributions from existing members.

One fifth of employers seeking to cut their costs said they were considering moving existing employees on to defined contribution schemes. Other employers said they were considering moving staff to career average schemes.

Three-quarters of the 300 employers surveyed said the government should make it easier for employers to offer “middle way” pension designs that share the risks more fairly between employers and employees.

Keith Barton, chairman of the ACA, told the Financial Times: “The government must act in 2010 to free up pension design.”

Staff at Fujitsu have shown they are willing to strike over the company’s plans to close its final salary pension scheme.

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