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83% Of DB schemes closed to new members

Eighty-three per cent of final-salary pension schemes are now closed to new members, says Aon Consulting.

Aon’s study of more than 100 managers of defined-benefit schemes found that the percentage of schemes open to new members has reached a low of 17 per cent compared with 28 per cent last year.

Tighter regulation of pension schemes, volatile market conditions and increased longevity assumptions were among the reasons cited as restricting the ability to offer DB schemes.

Of those schemes that are closed to new members, 81 per cent continue to allow further pension accrual for existing members.

The need to offer a competitive package to retain employees was given as the main reason why schemes are continued in this way.

Principal June Grant says: “With the number of final-salary schemes plunging to a record low, they have become gold dust for the employees who still have them.”

Equity Partners IFA Kevin Tooze says: “The fact that there are so few defined-benefit schemes available means that staff from many institutions have to look elsewhere for pension solutions.

“This provides the opportunity for advisers to show their value.”

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