UK – There are two million fewer people in defined benefit occupational pension schemes now than a decade ago, and only 200,000 of these are likely to be in a defined contribution plan instead, says the Trades Union Congress (TUC) after analysing statistics published by the government actuary’s department.
The TUC warns that the real decline may be even higher, given the number of company pension schemes that have closed recently and that the situation will get worse if the government doesn’t introduce compulsory employer contributions.
TUC general secretary John Monks says the recent closure of the Iceland and Ernst & Young DB schemes were only the tip of a large iceberg. “Over the last decade both employers and the state have been shifting responsibility for pensions provision on to individual employees, many of whom have no idea how poor they will be when they retire or simply do not have the spare cash to make the savings needed to build up a sufficient pensions pot of their own. That is why employers must be made to contribute to pension schemes.”
The issue of obligatory employer contributions also forms the basis of the TUC’s response to the government’s pensions simplification review. In addition the TUC also calls on the government to review the new FRS17 accounting standard, as this is one of the main reasons employers give for closing their DB schemes, and to simplify the legal and regulatory framework surrounding occupational pensions.
The TUC would also like to see a national education programme set up to ensure that people basically understand their own pension needs.