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83% of final salary schemes closed to new members

Aon Consulting has found that 83 per cent of final salary pension schemes are now closed to new members.

Aon’s study of more than 100 managers of defined benefit schemes found the number open to new members reached a record low of 17 per cent, compared to 28 per cent last year.

Aon’s employer survey found that tighter regulation of pension schemes, volatile market conditions, increased longevity assumptions were among the reasons cited as restricting the ability to offer defined benefit 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 given as the main reason why schemes are continued in this way.

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


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