17 August 2009
According to a survey by actuarial firm Watson Wyatt around half
the final-salary pension schemes in the private sector will close
to existing employees within the next three years.
Watson Wyatt surveyed more than 250 employers last month. Around
three-quarters of all final-salary schemes are already shut to new
recruits and only about 9% are closed to existing staff. 2009 has
already seen a number of employers closing their pension schemes to
all further contributions.
Watson Wyatt said that if its figures were followed through then
about one million people currently paying into final-salary schemes
would have to consider an alternative arrangement by 2012.
Rash Bhabra of Watson Wyatt said "When employers are cutting
jobs and freezing pay, pension arrangements will inevitably be put
under the microscope. At the same time, companies are confronting
much bigger deficits."
"These trends also get their own sense of momentum as companies
benchmark themselves against their competitors".
According to the most recent figures from the Pension Protection
Fund (PPF) the total deficit of the UK's 7,400 private sector
schemes currently stands at £158bn.
