10 August 2006
The Association of Consulting Actuaries has published a report
analysing the results of their latest survey into pension trends in
smaller firms.
The Association of Consulting Actuaries (ACA) 2006 Pension
Trends in Smaller Firms Survey was conducted earlier this year.
Over 460 firms, all with 250 or fewer employees, responded to a
wide range of topical pension and investment questions, including a
special section on pension reform proposals. The ACA has now
published a report analysing the results of the survey.
The key findings are:
Defined benefit coverage in steep decline as deficits
rise
Over 70% of the schemes of smaller firms are closed to new
members and over 40% to new accruals. Scheme funding levels of
these smaller schemes are - on average - 69%, with over a third of
schemes unlikely to recover deficits within 10 years.
Switch to lower-cost arrangements
As well as closing defined benefit schemes, there is evidence
that lower-cost and more lightly regulated pension arrangements are
displacing traditional defined contribution schemes.
Support for NPSS, but State reforms too
complex
Only 17% of firms actively oppose the NPSS proposal, but 68% say
the State reforms proposed by the Pensions Commission are too
complex. Firms say over 80% of employees do not understand the
State pension scheme.
The future: time and cost worries
Firms are most worried for the future about the management time
taken up by running schemes and the impact of legislation on
benefits and funding costs.
