"Two-thirds" of companies will cut payments into final pensions
01 September 2008
New research from Aon Consulting has apparently shown that two-thirds of companies which offer traditional final salary pensions plan to cut payments into them as of next year, according to a report.
The article in the Telegraph also says that a separate report by actuary Watson Wyatt claims one in 15 jobs currently advertised provide a final salary or defined benefit pension.
Employers are instead now changing to money purchase or a defined contribution fund says the Telegraph, which was apparently prompted by employers' fears of rising deficits.
Rising deficits have apparently been mainly caused by rising inflation and taxation, as well as falling returns in investments.
Marcus Hurd, senior actuary at Aon Consulting, said: "The threat of an impending recession is causing companies to haul in discretionary spends."
Ros Altmann, a governor of the London School of Economics, told the paper that final salary schemes were not suited to "21st century capitalism".
In related news, the Guardian recently reported that directors of financial institutions in the UK "have escaped unscathed" from the credit crunch with top executive pensions reaching an average of £3 million, according to figures from Pension Watch.
