No new pensions at top 100 U.K. public companies: Towers Watson
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There are no companies left in the London Stock Exchange's FTSE 100 that offer a final salary pension plan as their primary retirement plan for new employees, according to research by consultant Towers Watson & Co.
In 2005, one in every five employers in the FTSE 100 had an open defined benefit pension fund. Today, however, no employer offers this to new employees.
The research also showed that the proportion of FTSE 100 pension funds that had frozen had increased to 25%, from just 4% in 2010.
FTSE 100 pension funds have also, on average, increased in value, with 65% of funds having more than £50 million ($82.9 million) in assets. In 2006, only 27% had surpassed that value.
Towers Watson's 2014 research also shows that the move by companies to defined contribution plans from DB plans is also common for the FTSE 350 index of U.K. companies. Of these companies, 97% said their main retirement plan for new hires was a DC arrangement, with the residual DB offerings largely career average or cash balance arrangements, rather than final salary.
“This is the first year that no final salary schemes (are being offered) in the FTSE 100,” said Will Aitken, senior defined contribution consultant at Towers Watson, at a media briefing Tuesday.
Sophie Baker writes for Pensions & Investments, a sister publication of Business Insurance.
