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DB pension provision declining
28 August 2008 11:00
The proportion of defined benefit (DB) workplace pensions still available to new members has fallen again this year, according to a new report.
Just over one in six final salary schemes remain available to employees who have not already joined them, Aon Consulting's study showed, down from over one in four last year and around a half five years ago.
However, four out of five companies polled are still allowing their DB fund members to continue making pension accruals, with the need to remain competitive in order to retain staff the most commonly cited reason for this.
Aon's June Grant noted that as their provision declines, final salary schemes are all the more important to employees who already have them, while arguing that good design can protect DB funds from the threats of increased regulation and rising market volatility.
However, DB schemes are clearly under threat, with Bob Scott from acturial firm Lane Clark and Peacock predicting this month that half of the FTSE 100 companies will have closed their final salary schemes by 2012, replacing them with another pension vehicle.
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