Top executives are closing staff pension plans to new members while protecting their own rights, a new survey shows.
Research by financial advisers Origen revealed that two-thirds of final salary pension schemes are now closed to new members for ordinary employees in large UK companies.
However, about 45% of senior executives at the same firms still have access to final salary (defined benefit) schemes.
Employees are instead offered defined contribution schemes, where firms only guarantee the amount of money they will pay into a scheme rather than the amount it will be worth on retirement.
The survey showed that employers were paying an average of just 7% of staff pay into defined contribution schemes – just over half the 13.5% they contributed to defined benefit pensions.
The research also revealed the percentage of people not paying into a company pension has risen, with a third (34%) of workers do not pay into a company pension at all, up from 29% last year.
Under plans for a New Scheme of Personal Accounts, detailed in last month’s pensions white paper, employees will be automatically enrolled into a scheme when they start a new job.
