UK Defined Benefit Plans See Participation Decline

Figures from the  Office of National Statistics (ONS) also show a dip in private sector members by 400,000 to 4.4 million, while public sector participation showed a slight uptick of 100,000 to reach 5.1 million.

Of the defined benefit schemes in the private sector, the ones that are closed to new recruits now hold more contributing members than those that are still open, 1.73 million versus 1.63 million people.

However, statistics also found that DB schemes are far better funded, with employees and employers paying in much more money than into defined contribution plans.

Defined benefit schemes in the private sector still open to new participants saw their overall contribution rates rise from 16.8% to 19.2%. Contribution rates for schemes that are closed to new members were higher, but fell back from 21% to 19.5%, while overall defined contribution rates dropped slightly between 2004 and 2006, from 9.1% to 8.9%.

Both DB and DC plans that were open to new participants in 2006 held 59% of the active members in the private sector, but DC plans held the largest share of these participants .