U.K. Survey Finds Fewer Open DB Plans

August 25, 2008 (PLANSPONSOR.com) - A new U.K. survey has found that the number of final salary pension plans open to new members has dropped to a record low.

A news report in The Guardian said the Aon Consulting survey found that barely one-sixth of plans still have their doors open to new members, down from about a quarter last year and about half five years ago. Firms participating in the Aon survey blamed tighter regulation, volatile market conditions, greater life expectancy, and fears over future developments in accounting for pensions for the decrease.

The survey found that 81% of firms polled are continuing to allow further pension accrual in their defined benefit plans.

According to Aon, the falling number of plans means that defined benefit plans have an edge in retaining staff. “With the number of final salary schemes plunging to a record low, they have now become gold dust for those employees who still have them. Employers can turn this to their advantage because the schemes give them a competitive edge in the fight to attract and retain talent,” June Grant of Aon said.

For the survey, Aon questioned more than 100 managers of defined benefit pension schemes.