According to a press release, the results of the Pensions Scheme Risk Management Survey conducted by Jardine Lloyd Thompson and Financial Director Magazine included:
- 45% of organizations surveyed offer defined contribution (DC) pension schemes.
- 31% offer Group Personal Pensions (GPP) schemes.
- Of the 50% of respondents that still operated defined benefit (DB) pension schemes, 47% have now closed them to new employees.
- The average pension deficit was 15% of respondents’ total turnover.
The survey found that the major factor for changes to pension offerings was cost. The future for UK pensions is in GPP schemes, rather than trust-based DC schemes, according to the release. Respondents cited a lack of need for trustees, administration cost savings and superior information provision for employees as main reasons for this trend.
Many US companies have also frozen their DB plans in favor of DC plans (See Nissan Follows Trend of DB to DC Switch). A recent poll also documented the trend of freezing DB pensions in the UK (See UK Pensions Follow US Trend).