Almost two-thirds (60%) of respondents’ active pension scheme members are in a defined contribution (DC) scheme, compared to 32% in 2011, according to research by the Pensions and Lifetime Savings Association (PLSA).
Five year trend data from the PLSA’s annual survey, based on responses from 63 private sector employers, also found that 40% of respondents’ active pension scheme members are in a defined benefit (DB) pension scheme, down from 68% in 2011.
The research also found:
- The average employer contribution to DB schemes among respondents is 23%, increasing from 17% in 2011.
- Almost half (48%) of respondents’ DB schemes are closed to both new employees and future accrual, compared to around a third (31%) in 2011.
- Among respondents, the existence of a management or governance committee grew from 60% of contract-based schemes in 2011 to 78% in 2015.
- The average cost of record-keeping and administration of DB pension schemes for respondents is £48 per member, up from £29 in 2011.
Joanne Segars (pictured), chief executive at the Pensions and Lifetime Savings Association, said: “Our trend analysis finds many of the key trends continuing – the decline of DB being an obvious example. But next year we have the end of contracting out and the possibility of further radical changes to pensions tax relief. The former means increasing costs and complications for DB schemes in particular.
“The latter in its most extreme form could completely undo the most positive change in recent years of enrolling more than five million new savers in to pensions. So it’s possible that what we’re seeing this year is merely the calm before the storm.”