As increasing numbers of employers close their defined benefit (DB) pension schemes to new staff, it is not surprising that almost a third of organisations have turned to employees to help fund pension arrangements.
The Pension scheme risk management survey carried out by Jardine Lloyd Thompson in conjunction with Financial Director magazine found that 69% of employers had increased their DB scheme contributions. Nearly a third (31%) had also increased employee contributions. And a quarter of employers had made a one-off contribution.
Although half of the organisations surveyed said they still operated a DB scheme, 47% had already closed the scheme to new members.
Respondents were also questioned about how they were coping with any scheme deficits. The majority (55%) said the deficit was manageable, while 32% described it as significant to the organisation. Only 13% said the deficit was relatively small or insignificant. Overall, the average deficit was 15% of total turnover. When it came to other benefits, the majority of respondents said they had either increased the amount they spent on their benefits package (39%), or it had stayed the same (55%). Only 6% said their benefits spend had been reduced in the past year.
The report also commented on the low numbers of employers offering flexible benefits schemes – 73% said they had no plan in place.
Information sourced from the Pension scheme risk management survey conducted jointly by Jardine Lloyd Thompson and Financial Director magazine