A growing number of employers looking to pension buyouts for their defined benefit (DB) schemes, as well as closing plans to future accrual.
According to the PricewaterhouseCoopers Pensions Survey 2008, more than a third (35%) of employer respondents are looking at the option to buyout some or all of their pension liabilities, compared with 27% last summer. One-in-five (19%) of respondents are planning to buy out in the next five years compared to one in ten (11%) who said this last year.
Some 16%, meanwhile, said they have now closed their DB scheme to future accrual, while 11% expect to do so in the future.
The survey also showed that only 20% of respondents’ DB schemes are now open to new members compared with a third (33%) this time last year. However 88% said that pensions are equally or more important than three years ago in attracting, retaining and motivating employees.
Mark Hommel, partner at PricewaterhouseCoopers, said: “Despite the clear exodus from defined benefit provision, pensions play a critical role in attracting and keeping top-performing individuals. There has been a mass transfer of risk from employers to employees in relation to retirement savings. It is time for companies to step and help their employees navigate the consequences of this sea change.”