UK Employers Shutting DB Plans to Save Money
According to the survey by the London-based Association of Consulting Actuaries (ACA), 58% of the DB plans were closed to new members, while a further 10% were closed to new entrants and frozen to new accruals, according to a Business Insurance news report. The ACA said this shift was part of a trend of employers trying to reduce pension costs, among other things.
Overall, the concern among the future of pension plans in the UK is very high. The survey showed that about half (49%) of respondents were very concerned about the impact of legislation on benefits and funding costs, while the same amount said they were quite concerned, and only 2% replying that they didn’t care either way. Almost half of respondents (47%) said they were very concerned about the performance of investment markets, while a further 47% described themselves as being quite concerned.
Further, an additional 64% of respondents were quite concerned and 18% very concerned that the increasing public profile of pensions will lead to more costly and/or complex pension-related communications.
The ACA surveyed 392 employers sponsoring pension plans with total assets of £131.2 billion ($237.7 billion) covering more than 2.8 million employees. Of those, 71% were DB plans, 39% were DC and the remainder were hybrid, group personal pension, low-cost stakeholder and industrywide plans.
The study is here .
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