Companies in pensions cull as crisis bites
MORE than nine out of ten employers are planning to scrap or scale back their defined benefit pension schemes, a survey has revealed.
As companies fight for survival following the global economic crisis pensions are being sacrificed.
In the poll of 179 major employers, including 34 with more than 10,000 employees, and 38 of the FTSE 100 – only six per cent said they would retain defined benefits pension schemes in their current form.
The number of companies that have shut defined benefit schemes to existing employees has more than doubled since last year – from 14 per cent to 32 per cent, according to the research by business advisers PricewaterhouseCoopers.
Meanwhile a further 30 per cent of employers intend to close defined benefit schemes to existing staff.
The survey also showed that 87 per cent of employers believe that employees are not saving enough for retirement while 60 per cent think that their employees will not be able to retire when they wish due to insufficient savings.
Marc Hommel, pensions partner at PricewaterhouseCoopers said: “Employers are sounding a repetitive death knell for defined benefit pensions. The size and volatility of funding costs, and also concerns about the inequality of pensions provision within an employer’s workforce, are accelerating their demise.
“Companies recognise the value to their businesses and people of providing workplace pensions but not at the risk of jeopardising the business as a whole.”
FAST FACTS | PENSION SURVEY
● Only six per cent of companies polled said they would retain their defined pension schemes in their current form.
● 87 per cent of employers do not think their staff are saving enough for their retirement.