DC plans overtake final salary

The number of defined contribution (DC) pension schemes has now overtaken final salary plans. The average contributions of these schemes are 11% of salary, comprising 4% employee contribution and 7% employer funded. Less than half of employees eligible join their occupational DC scheme, while more than 60% of schemes have an average contribution rate well short of the 12% benchmark required for a retirement pension equivalent to two-thirds salary.

  • To order a copy of Hewitt Associates’ 2005 Defined contribution and additional voluntary contribution (DC & AVC) survey contact Alex Bateman on 020 7939 4000; Costs £450.