| Click for the Finfacts Ireland Portal Homepage |

Finfacts Business News Centre

Home 
 
 News
 Irish
 Irish Economy
 EU Economy
 US Economy
 UK Economy
 Global Economy
 International
 Property
 Innovation
 
 Analysis/Comment
 
 Asia Economy

RSS FEED


How to use our RSS feed

 
Web Finfacts

See Search Box lower down this column for searches of Finfacts news pages. Where there may be the odd special character missing from an older page, it's a problem that developed when Interactive Tools upgraded to a new content management system.

Welcome

Finfacts is Ireland's leading business information site and you are in its business news section.

We provide access to live business television and business related videos from: Bloomberg TV; The Wall Street Journal; CNBC and the Financial Times. Click image:

Links

Finfacts Homepage

Irish Share Prices

Euribor Daily Rates

Irish Economy

Global Income Per Capita

Global Cost of Living

Irish Tax - Income/Corporate

Global News

Bloomberg News

CNN Money

Cnet Tech News

Newspapers

Irish Independent

Irish Times

Irish Examiner

New York Times

Financial Times

Technology News

 

Feedback

 

Content Management by interactivetools.com.

News : EU Economy Last Updated: Feb 22, 2010 - 6:08:11 AM


Defined benefit pension schemes will disappear from the UK this decade
By Finfacts Team
Feb 22, 2010 - 6:00:54 AM

Email this article
 Printer friendly page

The number of UK companies operating a defined benefit pension scheme is shrinking all the time, but the recent financial crisis has accelerated the demise of the final salary benefit, so much so that UK companies predict that defined benefit schemes will cease to exist within the next decade.

This is according to a report and survey published last week, The future of corporate pensions, written by the Economist Intelligence Unit and sponsored by Buck Consultants.

Asked about the biggest challenges their firms will face this year in managing their pension schemes, the 251 executives surveyed for this study point to increasing deficits, possible regulatory intervention and uncertainty over future interest rates. Of those UK companies surveyed, 20% still offer a defined benefit pension scheme that is open to new employees, but three-quarters predict that these schemes will no longer exist by 2019.

Other key findings from the research include the following:

  • Limited appetite remains for transferring liabilities to an insurer, but this is likely to be a growing trend post-recession .Just 7% of survey respondents say that they have transferred some of their liabilities to a third-party insurer in the past three years, while 6% have transferred all their liabilities. A growing proportion, however, see this as something they may consider in the future. Almost two-fifths say that they expect to transfer some of their liabilities in the next three years, while 10% plan to transfer the entire scheme.

  • Companies see pension schemes as an important competitive differentiator, yet they worry about the inadequacy of defined contribution plans. Asked about the key reasons for providing a pension plan—whether defined benefit or contribution—respondents point to the need to stay competitive with other companies in their sector. This highlights the importance of a generous, well-run pension scheme as a source of differentiation and a tool for recruitment and retention. Companies also recognise that they have a duty to provide for their employees’ retirement.

  • Most employers will maintain their contributions at a steady level, despite the forthcoming introduction of personal accounts. The average allocation to defined contribution plans among survey respondents is 9%, and almost two-thirds of respondents say that they will maintain employer contributions at the same level over the next three years. Smaller companies, in particular, are adamant that they will make no change to contributions, with three-quarters indicating that they will hold them steady.

  • Guidance for employees must improve as the pensions environment changes. Given that employees are increasingly responsible for investment decisions and the provision of adequate funds for retirement, companies must ensure that they put in place a robust framework for providing guidance and advice on an ongoing basis—not just when an employee first joins the company.

The future of corporate pensionsis an Economist Intelligence Unit executive summary, sponsored by Buck Consultants. In November 2009, the Economist Intelligence Unit conducted a survey of 251 senior executives from UK companies about their perceptions of the changing pensions environment. The EIU said survey respondents represent a wide range of industries, including financial services, professional services, manufacturing and information technology. Just over half of respondents represent companies with revenues of £250m or greater and 50% of those surveyed were C-level, or board-level, executives.

Related Articles
403 Forbidden

Forbidden

Execute access is denied.


© Copyright 2009 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Investor sentiment in Germany rose sharply in December
Eurozone business activity grew at a slightly faster rate in December
ECB hopes SME firms will gain from Thursday's refinancing operations
Ifo Institute says German economy to gain impetus in 2015
German per capita standard of living highest in Europe; Ireland below EU average
Youth unemployment problem in Eurozone pre-dated crisis
German imports fell sharply in October; Exports at monthly record high
German jobs rise all in full-time employment unlike in UK, Ireland
ECB to consider QE in January; Cuts forecasts
ECB and Bank of England keep rates at record lows
ECB Meeting: Draghi may reaffirm plans for QE or fudge it
Eurozone retail sales volume up in October - remains at 2004 level
German manufacturing wages are the highest of big industrial nations
Germany, France and Italy call for EU directive on tax reform
Manufacturing PMI surveys show Germany, France & Italy contracted in November
Eurozone inflation fell to 0.3% in November; Jobless rate in Germany lowest in Europe in October
German consumer climate improving as year draws to close
France's 10-year bond yield below 1% for first time; Draghi pushes for economic union
German employment at record high
Eurozone leading index fell in October; ECB to decide on QE early in new year
European Commission announces €315bn Investment Plan to get Europe growing
German Bundesbank calls for end to special treatment for sovereign bonds
Lux Leaks: European Commission facing censure motion in European Parliament
Euro bond yields fall to new record lows; Spain below 2%; Ireland at new record
German business climate improves for first time since April
British professor wants ECB to give every adult Eurozone citizen €500
Strong data from US this week and weak data elsewhere
Eurozone manufacturing/ services slowed to a 16-month low in November
European cars sales up in October for fourteenth consecutive month
German ZEW sentiment indicator jumps in November
Belgium accuses HSBC Private Bank of money laundering/ tax evasion
GDP up by 0.2% in Eurozone in Q3 2014 and up by 0.3% in EU28
German GDP up 0.1% in third quarter of 2014; France up 0.3%
European Commission expected to say Starbucks got special tax deal from Netherlands - Update
Juncker on Corporate Tax: Poacher-turned-gamekeeper proposes new rules
Eurozone industrial production in September recovers slightly from August slump
Architect of tax "racket" to commit EU to fight against tax fraud
German GDP growth will be below 1% in 2015; Former East still lags
Ireland accounted for 25% of ECB's emergency lending by time of 2010 bailout
Luxembourg Leaks: Irish Government's guff on tax system exposed; "Racket" needs to stop