More companies closing pensions schemes

The use of new strategies to reduce or rid the balance sheet of defined
benefit (DB) pension liabilities is accelerating as a growing number of UK
companies close their schemes, according to the latest
(PwC) survey of corporate pension decision makers.

The survey, which tracks the opinions of pension decision makers in 86 UK
organisations, found the exodus from DB provision increased disproportionately
with the importance of pensions in attracting and keeping top performing staff.

Marc Hommel, PwC partner, said a mass transfer of risk from employers to
employees in relation to retirement savings had been occurring. ‘It is time for
companies to step up and help their employees navigate the consequences of this
sea change,’ he said.

In the last six months, the number of schemes closing to existing employees
has jumped by about 13 percentage points. In addition, the closure of DB schemes
to new employees continues to accelerate and only 20% of respondents’ DB pension
schemes are now open to new members, compared with 33% last year.

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