UK – Companies are making efforts to keep their final salary pension schemes open, according to a survey from Mercer Human Resource Consulting.
“In the last two years there has been a dramatic fall in the number of final salary schemes open to new members,” said Mercer partner Peter Bowers. “Now companies are seeking ways to retain their final salary schemes on a more cost-effective basis.”
He was referring to a survey conducted in March which covered 1,823 UK pension schemes with total funds of 207 billion pounds.
“Final salary schemes are highly valued by employees and can help to differentiate companies when recruiting staff. In future, members’ benefits are likely to be lower and their contributions may be higher, to make schemes more affordable.”
Mercer said many final salary schemes that have already closed to new members are also making policy changes to help protect members’ benefits.
Thirty-seven percent had raised employer contributions, or intend to, while 28% will raise employee contributions. And 15% have decided to reduce benefits for future service.
The survey found that 92% of final salary schemes in the Government sector are still open to new members.
The firm said that the percentage of companies with final salary schemes open to new members has fallen from 56% in 2002 to 38% this year.