New research from Income Data Services of 339 major UK pension plans reveals that a 14.3% rise over the year and 25.0% two-year hike is mostly attributable to special contributions rather than normal payments, according to a story on UK HR Gateway. The story said the special payments reflect cost pressures on organizations in dealing with pension deficits and early retirements. Pension contributions typically rise by 9.0% over the year, according to the survey.
According to researchers, given the increase in earnings over the year – 3.4% as of March 2002 – employers could have expected contributions to rise by around 3.0%, leaving 11.0% of the yearly increase to be accounted for by other factors. Those include:
- plan actuaries recommending a rise in payments
- bulk transfers from acquisitions and disposals
- the change in plan year-end date.
The largest employer contribution was the £1 billion
paid by the BT group, with special contributions making up
£700 million – 139% of the previous total.
However, of the 53 defined contribution, the 270 defined benefit and the 16 combination plans covered in the survey, one in ten saw no employer contributions being paid over the past year.