View more on these topics

Over 80% of DB plans shut to new entrants

Eighty-one per cent of defined-benefit schemes are closed to new entrants compared with 68 per cent two years ago, according to a survey by the Association of Consulting Actuaries.

The research involved 300 employers with scheme assets exceeding £127bn and over 2.1 million members.

It found that over 80 per cent of schemes were in deficit at their last funding valuation but that two-thirds of employers have made special contributions to close the funding gap and responded to The Pension Regulator’s call for scheme sponsors to generally reduce deficit recovery periods.

Over the last five years, average employer contributions have doubled to 23 per cent of earnings and member contributions have risen to 6 per cent.

Seventy per cent of schemes expect to remove their deficit within 10 years and the ACA says this figure may improve if the upward trend in long-term real interest rates and investment markets persists.

Chairman Ian Farr says: “The big downside of the scheme closures that have taken place as private sector employers have derisked for the future is that we are facing the prospect of growing under-pensioning in respect of millions, particularly the young and middle-aged.

“The Government must act quickly to encourage pension provision that is better than a minimum level through personal accounts, where we feel there is some over-optimism in terms of the scale and the reliability of the pensions that this scheme will deliver.

“For that reason, we have called for legislative changes to encourage more risk-sharing schemes. Failure by Government to act decisively and radically in terms of private pension reforms will breed growing resentment between private and public-sector employees, where pensions are now often much better.”


Skandia’s paid critical illness claims up

Skandia paid 89 per cent of critical illness claims in the year to June 2007, up one percent from the previous year.Two per cent were declined due to non-disclosure and 9 per cent were declined because the claim had not met the definition.Cancer remained the most commonly claimed for condition, accounting for 51 per cent […]

Golden nuggets

Let me put you straight on one thing. Last week’s comments were assembled a week before publication and were not a knee-jerk reaction to the sell-off in markets in the middle of last week stimulated by the downgrading of sub-prime debt by the rating agencies. In face, the sell-off did not appear too damaging. One […]

A lesson in education

Iam sure I was not the only IFA seething as Ed Balls was unveiled in his new Cabinet role. Balls has hardly disguised his contempt for IFAs, noting that he was surprised that so many had survived.Now he his ensconced as minister for children, schools and families and within days has announced an initiative to […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment


    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm