| 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
Related Articles


© Copyright 2009 by Finfacts.com

Top of Page

EU Economy
Latest Headlines
Eurozone economy loses growth momentum; Jobs growth rises
Athens leak suggests Juncker has plan for Greece
Draghi will not end QE early but warns of risks
Eurozone grows faster than US and UK in Q1 2015
German GDP at slower pace, France faster in Q1 2015
Germany may cut income tax; Germans still shun risky investments
Germany had record exports and imports in March 2015
Eurozone manufacturing growth continued in April
Economic sentiment declines in Eurozone in April; Germany/ France dips
More than one-in-five EU part-time workers underemployed; 29% in Ireland
Eurozone growth edges lower at start of second quarter
Global investors fear bond/ share bubbles as Faust stalks euro debtors' paradise
Germany and the structural decline in global trade - Part 2
German exporters facing strong headwinds despite a lower euro - Part 1
Two-thirds of new consumer products flop within 2 years in Germany
Greeks pay a lot of tax
IMF critical of Swiss franc-euro ceiling decision
Eurozone growth gathers momentum as manufacturing/ services PMI nears four-year high
Despite Eurozone recovery 1 in 10 will remain jobless
Big European banks reported improved performance in 2014
Long-term Euro Area growth prospects grim even at pre-crisis jobs/investment rates
Global investors paring back US share exposure; Skepticism on rise of European shares
Fall in collective bargaining main factor in rising German wage inequality
European Commission proposes transparency on tax rulings for multinational firms
Euro would survive Greek exit: Tsipras to visit Berlin/ Moscow
Greek court indicts 64 people including 13 Germans in Siemens bribery case
German exports fell by the largest amount in five months in January
China was EU's second biggest goods market in 2014; Germany accounted for 45% of exports
Eurozone services PMI rose for third straight month in February
Germany at full-employment: Lessons for low-pay US manufacturing
Automotive industry accounted for 18% of German goods exports in 2014
Eurozone unemployment slightly falls; Germany & Austria below 5%
Eurozone deflation risks receded in February
Eurozone manufacturing maintains modest growth in February
Greece's bailout extended for 4 months; IMF, ECB dissent
China's manufacturing PMI in slight rise in month of little activity
Growth in Europe stunted by capital shortage/ fragmentation
Growth of Eurozone business activity at seven-month high in February
Germany demands 3-sentence letter on bailout extension
Euro area growth up 0.3% in Q1 2014; Up 0.4% in EU28