More final salary pensions schemes close to new members

Friday, 27 November 2009 10:15

The recession has continued to take its toll on private sector final salary pension schemes, according to the National Association of Pension Funds (NAPF).

Its annual survey, released today, reveals only 23 per cent of final salary schemes remain open to new members, compared to 28 per cent a year ago.

The NAPF said the fall in the number of schemes open to new members was more than in the two years combined because of the recession.

Worst still three out of ten final salary schemes open to existing members plan to close completely in the next five years.

Vodaphone is the latest big company to announce it is closing its final salary pension scheme to existing members

The NAPF says pension funds want to see decisive action from the government to support workplace pensions. They believe the most effective way government could support pension funds would be to issue more long-dated and index-linked bonds, with 82 per cent saying this would be either very or quite helpful. This single measure would help to reduce pension fund deficits and liabilities having a positive effect on t

NAPF chief executive, Joanne Segars, said: “The government can no longer sit on its hands. It must take bold and positive action to help support employer-sponsored pensions. The chancellor has a golden opportunity to make a difference in his Pre-Budget Report by announcing that the government will issue more long-dated and index-linked gilts.

“This single measure would benefit pension funds by helping to reduce deficits and support corporate scheme sponsors by reducing the scale of pension fund liabilities on their balance sheets.

“It is an opportunity that must not be missed.”

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