More than half (58%) of employees have had to increase their contribution levels into defined benefit (DB) pension schemes in the past 12 months.
Other employers (17%) have moved from offering a DB scheme to a defined contribution (DC) plan in a bid to control costs, while a further 12% have increased company contributions to a DC scheme, according to The changing nature of corporate pensions in the UK, by consultancy Towers Perrin.
A fifth of respondents intend to increase their contributions to DC schemes in the next two years, while just under a third (31%) plan to raise employee pension contributions in the same time frame. The same number (31%) propose to replace staff contributions with a salary sacrifice arrangement.
A further 21%, meanwhile, plan to integrate their organisation’s pension schemes into a flexible benefits plan.
The demise of DB schemes looks set to continue, with 14% of respondents planning to close their scheme to new entrants.
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|What changes do employers propose to make to pension plans over the next two years?|
|Lower value of defined benefit (DB) plan||40%|
|Replace employee contributions with salary sacrifice||31%|
|Increase employee contributions||31%|
|Integrate with wider flex programme||21%|
|Cash alternative to pensions||20%|
|Increase employer DC contributions||20%|
|Close DB to new entrants||14%|