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Member, Beacon International Group, Ltd.
A majority of U.K. employers say they are not planning to close their defined benefit pension plans to new participants, a survey reveals.
A survey of 940 companies, conducted by the Confederation of British Industry and Mercer Human Resource Consulting, found that 24% of respondents have closed their defined benefit plans to new participants within the last five years, while a further 12% are considering doing so. But 64% of companies surveyed said they do not plan to close their plans to new participants.
Meanwhile, debate at the Trades Union Congress annual meeting this week will center on occupational pensions. John Monks, general secretary of the London-based labor federation, has accused the U.K. government of taking too long to respond to what he characterizes as a pensions crisis, with many defined benefit plans closing to new members in recent years.
And Roger Lyons, joint general secretary of the London-based manufacturing union Amicus, said 90% of its members were prepared to strike to defend their defined benefit plans. Last month, workers at three U.K. steel mills staged a walkout over the closure of their company's plan to new participants.
The TUC also has called on the government to mandate employer contributions to occupational pension plans, to ensure that workers have adequate savings at retirement (BI, Sept. 2).
But John Cridland, deputy director general of the CBI, said in a statement that, although there is "clearly a need for a national debate on pensions, as many employers are struggling to maintain traditional provision despite their best efforts," compulsory employer contributions are "not a realistic solution."
Mr. Cridland said that compulsory pension contributions could make companies reluctant to employ more individuals and could even threaten the viability of some smaller companies.
Copies of the CBI/Mercer survey are available at www.cbi.org.uk.