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Final Salary Pension Scheme Closures Slows

Fewer final salary pension schemes closed to new members in the 2004-2005 tax period than in previous years, official figures claim.

The Pension Regulator said that 83 final salary schemes were closed during past tax year, half the number in 2003-2004 and almost a quarter of the number in 2002-2003.

But experts say the figures do not reflect a change in the trend.

Malcolm McLean, chief executive of the Pensions Advisory Service, told the BBC: "The rate of closure may be slowing but this merely reflects the fact that many employers have already taken the step."

"This is not a sign that UK's pension problems are easing, employers are still finding it incredibly difficult to fund schemes," he added.

There are currently almost 10,000 final salary schemes active in the UK. They work out well for employees because they are given a fixed percentage of the salary they earned in their final job before retirement. But employers found them to work out too expensive.

In recent years many employers have shut their schemes due to mounting costs and stockmarket underperformance.



27/10/2005
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