UK - Seven out of 10 Britons fear company pension schemes could be closed to all workers because of the tax changes in this year's Budget.
An online nationwide survey, carried out last month by Hymans Robertson, has found the majority of people think the decision by Chancellor of the Exchequer, Alistair Darling, to reduce the tax relief on pension contributions by individuals earning over £150,000 (€170,000) a year will make it less appealing to firms to keep schemes open.
More specifically, 47% of respondents said they were aware of the increase in taxation, showing that pensions continues to be a major topic of importance for the general workforce, according to Hymans Robertson.
Yet nearly as many - 45% - believe that the policy to cut tax relief for high earners is a bad idea.
"Regardless of their own income, people are aware that the government's increase in taxation for high earners will affect us all, as key company decision makers are less likely to keep a pension scheme open if they themselves stop paying into it because it is not tax-effective," said Patrick Bloomfield, partner at Hymans Robertson.
It is not only the average Briton who fears for the future of occupational schemes as pension professionals have rushed to predict the death of final salary schemes in a week when announced closures of DB schemes came thick and fast.
Alex Waite, head of corporate consulting at Lane Clark & Peacock, said the company's previous prediction that "significant numbers" of final salary pension schemes would freeze benefits was materialising, and that this trend would continue.
"Recent announcements by BP, Barclays and Morrisons call into question the notion that there will always be a group of corporates out there willing and able to operate a final salary pension scheme," he said.
"Companies have seen funding deficits grow rapidly over the last 12 months, but cash simply isn't available to fill the black hole. By freezing their schemes, company directors can limit the ongoing cost," he added.
Jane Marshall, partner with Macfarlanes, the City law firm, said increased longevity, poor investment performance and regulatory burdens had made final salary schemes very expensive.
"Companies have to compete with others who do not have these pensions costs, both in the UK and globally," she said. "It is not surprising that they are trying to balance the interests of all their employees with the need to grow their business and profits."
Meanwhile, smaller companies are also grappling with the pensions nightmare, according to Gary Tansley, senior consultant with Hamish Wilson, the pension consultants.
In his firm's response to the DWP's proposals on auto-enrolment, Tansley said: "The automatic enrolment process contains rigid time limits that are simply unfeasible for most small organisations. Those who rely on a single employee to attend to payroll matters on a part-time basis will find it almost impossible to comply."
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