Once taken for granted, final
salary pension schemes are fast becoming a thing of the past in the
UK, highlights the
National Association of Pension Funds’ (NAPF) 2010 annual
review.
According to the NAPF, its
study conducted in late-2010 revealed that 17% of final salary
schemes have shut their pension to both existing and new
members.
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This was up from 7% in the
NAPF’s survey in 2009 and 3% in 2008.
“The pressures on final
salary pensions are relentless, and their rate of decline seems to
be shifting into a new gear,” observed NAPF CEO Joanne
Segars.
She continued that while the
rate of closures to new staff seems to have levelled off, those who
are already in a final salary pension increasingly find themselves
being locked out.
“Many people will feel
aggrieved that they can no longer build their final salary pension
up,” said Segars.
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By GlobalDataOn admission to final salary
pension schemes, the NAPF study found that 21% of private sector
schemes are still open to new joiners compared with 88% in
1999.
The NAPF’s 2010 survey also revealed that a third of final
salary schemes are planning changes around their existing members,
including cutting benefits or migrating staff to a defined
contribution pension scheme.
