UK - The government was today accused of complacency over its approach to the recent acceleration of defined benefit scheme closures in the UK. Speaking at the NAPF investment conference in Edinburgh, Colin Richardson, a partner with actuaries firm Barnett Waddingham, said that the government's official figure of 41 closures closures in 2001 was bogus and the real figure is many times greater.

In response to the accusation, the government's economic secretary to the treasury, Ruth Kelly, said the real issue was not about defined benefit or defined contribution but the level of employee contributions, which she admitted had fallen from 12% to 6% in the past few years. "This is what we need to look at, for, providing contributions levels are good, DC can be just as good as DB for people in the right circumstances," she said.

Richardson said that his firm has been advising numerous companies recently on changing or closing their DB schemes and thinks the government should modify its advertising and education programme to encourage more people in their 30s to save more.

During her key-note speech that had led to the accusation, Kelly said that 41 final salary schemes closed last year, compared to just 18 in 2000. However, she claimed this was nothing more than the result of a trend going back to the 1960s. "The real factors influencing the move from DB to DC are a more flexible labour market, increased life expectancy and stock market growth," she said.

Peter Thompson, chairman of the NAPF, defended the accuracy of the government’s figures but noted they only refer to the year ending July 2001. Closing, he said that the rate of DB scheme closures has accelerated considerably since then.