The ACA says that of the schemes closed to new entrants, 18 per cent are also closed to future accruals.
Employers said 39 per cent of defined benefit schemes were presently considering changes to future accrual, with 35 per cent considering a move to career average and 22 per cent a move to defined contribution.
Yet 76 per cent of employers felt their employees were uncomfortable in taking on the investment, inflation and longevity risks inherent with defined contribution schemes.
Meanwhile, 81 per cent felt employees were not capable of determining how they should manage defined contribution saving.
Seventy-seven per cent of employers said that present legislation did not allow them to easily share investment, inflation and longevity risks with employees, while 76 per cent said public policy should be more supportive of employers by allowing them more flexibility over pension designs.
The ACA says middle way designs would enable employers to hold down pension costs by, for example, holding back or removing compulsory indexation of benefits, whilst continuing to provide the greater stability and certainty of benefits that accrue under defined benefit arrangements.
The ACA found combined employer and employee contributions into DB schemes now average 29.5 per cent of total earnings, close to double those found in 2002 when combined contributions averaged 15.8 per cent of earnings.
But combined savings into defined contribution schemes are running at around one-third of this level at around 10 – 11 per cent of earnings, having only marginally increased by on average 1.5 per cent since 2002.
ACA chairman Keith Barton says: “The present Government’s latest ‘concession’ indicating a willingness to deregulate only if defined benefit schemes are kept open is not the right approach.
“Reforms to free up designs, provided these protect the position of members in the event of employer insolvency, must come without duress and employers should then be able to choose the design most appropriate to them for recruiting and retaining quality employees.”