The most influential factor for movements in the nature of UK pensions provision was cost related, the results of the Pensions Scheme Risk Management Survey conducted by Jar dine Lloyd Thompson and Financial Director Magazine found.
The report shows that 45% of organizations surveyed operate defined contribution (DC) pension schemes; 31% offer group personal pensions (GPP) pension schemes; half of respondents that still operated defined benefit (DB) pension schemes and 47% of these are now closed to new entrants; the average pension deficit was 15% of respondents’ total turnover.
“It is unsurprising that cost is now the major factor for changes to pension provision, with survey respondents’ average deficit representing 15% of their total turnover,” said Richard Roper, head of client services, JLT Benefit Solutions Limited. “The trend is likely to continue unabated, with a further 9% considering changes in the foreseeable future.”
The report found that the majority of changes are taking place within defined benefit and occupational defined contribution schemes, where the shift away from the ‘open chequebook’ scenario of defined benefit schemes is clear, but is now being followed by an exodus from trust based money purchase schemes.