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7 January 2010 90% of firms ‘close defined benefit schemes’

Quality pensions in the private sector are in rapid decline, with nine out of 10 defined benefit schemes now closed to new entrants.

Those are the findings of a new report conducted by the Association of Consulting Actuaries (ACA).

Meanwhile, the study found that 18% of schemes are closed to future accruals from members. At the time the research was carried out 91% of schemes were in deficit, with the average ongoing funding level at 79%.

ACA chairman, Keith Barton, said these were ‘worrying times for all those looking to retire in the years ahead.’

He added: ‘Just 6% of employers responding to the survey say they feel the Government's stated policy of supporting quality workplace pensions is working, down from 38% two years ago.’

Of the 309 firms quizzed, 24% are considering cutting benefits when they have to enrol all staff in workplace pensions in 2012.

Commenting, a spokesperson for the Department for Work and Pensions said: ‘We are also supporting good quality pension provision through our deregulatory review. We have eased the burden of revaluation and indexation which has the potential to save employers about £250m per year on average in the longer term.’