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Over 6,700 company pension plans axed

More than 6,700 company pension schemes were closed last year, reducing the number of occupational schemes by 6 per cent, according to figures from the Occupational Pensions Regulatory Authority.

The wave of closures means that 437,000 workers&#39 occupational schemes were affected.

The figures come a week after former National Association of Pension Funds chairman Alan Pickering reported that employers should be given more freedom to axe spouses&#39 benefits and inflation protection to reduce the flight from occupational schemes.

Although some workers have more than one scheme, the figures do not include firms which have switched from defined-benefit to defined-contribution schemes. Opra says the majority of the schemes that have closed have fewer than 11 members.

The 6,700 schemes were either closed to new members but continue to run for existing members, frozen for existing members and closed to new members or wound up where companies have gone into liquidation.

Opra communications dir-ector Nick Edmans says: “Rising costs of pensions are being caused by increased longevity, the decline in the stockmarket, increased regulatory costs and the removal of advance corporation tax relief on dividends. Those running schemes want to cap these rising costs.”

Britannic Retirement Sol-utions head of communications Jim Boyd says: “This slide has been anticipated for some time. It is shocking for the employees who are losing benefits but, in light of the vast pension liabilities that are accruing, accountants and actuaries are realising their companies need to get back to their principal business and their principal business is not running company pension schemes.

“Pickering&#39s report is a valiant effort to shore up this decline and his success will be determined by how this slide is arrested.”

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