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Company pension schemes fall further

12 May 2004
The number of final salary company pension schemes closed to new staff has doubled over the last two years, according to a new study from JPMorgan Fleming.

It found that 61 per cent of the UK's top funds have closed their final salary or defined benefit schemes to new members, up from the 30 per cent of schemes closed to new staff in 2002.

It was also discovered that while 60 per cent of funds now provide less generous defined contribution schemes, 79 per cent of those which do not claim to have no plans to introduce one.

JP Morgan Fleming's Karen Roberts commented: "The move from defined benefit to defined contribution is clearly indisputable, and if this continues at around 12 per cent a year, defined contribution schemes are likely to become the main means of pension provision for new members in the very near future."

The research, conducted in conjunction with Professional Pensions magazine, also includes estimates by several companies predicting that the Government's proposed £1.5 million lifetime limit on pension savings would affect around 20 members of each scheme.