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Final salary pensions: 87% are now closed Go compare with our comparison table

Final salary pensions: 87% are now closed

05 January 2010 / by Rebecca Sargent

Almost nine out of ten final salary pension schemes are now closed, research from the Association of Consulting Actuaries (ACA) has revealed.

The study also found that 18 per cent of the defined benefit pension policies are now closed to future accruals.

The statistics have been branded as 'worrying' by the ACA, particularly as just six per cent of respondents feel that the Government's policy of supporting quality workplace pensions is working.

The Government's Department for Work and Pensions claims that its pension reforms were 'radical', and that automatic enrolments into Personal Accounts would mean that 11 million workers would be able to save for their pensions.

However, Personal Accounts, which target lower earners, look set to be delayed, as the Government phases them in, and there are concerns over their affordability for the employer.

Commenting on the state of the UK's final salary pension schemes, ACA chairman, Keith Barton said: "These are worrying times for all those looking to retire in the years ahead.

"Whilst the Government's Personal Accounts initiative eventually may bring on board more pension savers, it has to be remembered that these accounts are designed to 'fill the gap' with a low-level pension, where no better pension scheme exists. Quality pensions require higher contribution levels," he said, adding:

"Public policy seems to be locked into justifying ever heavier regulation and cost under the banner of protecting accrued benefits for generally older employees, but with scant regard for the future pension security of millions of younger private sector employees.

"There needs to be a more balanced approach where the rising numbers of under-pensioned in the private sector get a better deal, with employers' costs capped and with proportionate protection across all age groups."

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