Pension retreat is gathering pace

Published on Friday 18 July 2008 21:26

THE retreat from defined benefits (final-salary) pensions is rapidly gathering pace, according to new research.

More than 40 per cent of UK defined-benefits (DB) schemes are expected to have closed to future accrual within the next decade, according to the annual plan design survey by consultancy Watson Wyatt.

The same period will also see a fall from 25 per cent to 14 per cent in the proportion of DB schemes open to new entrants, it predicted.

"Our survey found organisations acutely focused on the need to manage the cost and risk of DB pensions," said Kathryn Armistead, senior consultant with Watson Wyatt.

"A small but growing number of firms are ceasing final-salary accrual for existing members and this trend is expected to accelerate."