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| Private sector pensions in seismic collapse, says ACA | Private sector pensions in seismic collapse, says ACA |
| (about 7 hours later) | |
| There has been a "seismic collapse" in private sector pensions, and the gap between private and public pensions is widening, a report warns. | |
| The Association of Consulting Actuaries (ACA) says that nine out of 10 private sector defined benefit schemes are now closed to new entrants. | The Association of Consulting Actuaries (ACA) says that nine out of 10 private sector defined benefit schemes are now closed to new entrants. |
| The ACA wants bold government action to reinvigorate workplace pensions. | The ACA wants bold government action to reinvigorate workplace pensions. |
| Automatic enrolment, set to begin later this year, would enable millions of people to save, the government said. | Automatic enrolment, set to begin later this year, would enable millions of people to save, the government said. |
| But Stuart Southall, chairman of the ACA, said that while automatic enrolment should widen private sector pension coverage, "the fact that recently the government had to delay its introduction for smaller employers, because of the deteriorating economic climate, is discouraging". | But Stuart Southall, chairman of the ACA, said that while automatic enrolment should widen private sector pension coverage, "the fact that recently the government had to delay its introduction for smaller employers, because of the deteriorating economic climate, is discouraging". |
| Defined benefit schemes give members a guaranteed pension, based either on their final salary or their average pay over the length of their career, depending on the scheme. | Defined benefit schemes give members a guaranteed pension, based either on their final salary or their average pay over the length of their career, depending on the scheme. |
| There are some 23 million workers in the private sector in the UK, and six million in the public sector. | There are some 23 million workers in the private sector in the UK, and six million in the public sector. |
| The ACA said that while more than five million public sector employees enjoyed "open" defined benefit pension schemes, fewer than two million workers in the private sector were now in largely "closed" schemes. | The ACA said that while more than five million public sector employees enjoyed "open" defined benefit pension schemes, fewer than two million workers in the private sector were now in largely "closed" schemes. |
| Incentives needed | Incentives needed |
| The ACA, whose members advise pension schemes, surveyed 468 employers who run 560 pension schemes. | The ACA, whose members advise pension schemes, surveyed 468 employers who run 560 pension schemes. |
| As well as those private sector defined benefit schemes closed to new entrants, it found that four out of 10 are closed to future accrual. | As well as those private sector defined benefit schemes closed to new entrants, it found that four out of 10 are closed to future accrual. |
| It said that just over a quarter of employers had budgeted for the cost of workplace pension auto-enrolment, which is being phased in from October, while a fifth of employers were looking to decrease their pension spend. | It said that just over a quarter of employers had budgeted for the cost of workplace pension auto-enrolment, which is being phased in from October, while a fifth of employers were looking to decrease their pension spend. |
| Stuart Southall said an easing in regulatory controls and new incentives were needed to encourage employers and employees to boost pension savings. | Stuart Southall said an easing in regulatory controls and new incentives were needed to encourage employers and employees to boost pension savings. |
| "The government needs to be bold in helping private sector employers so they can consider new ways to boost pension savings over the mid to longer-term so public sector pensions are not 'far better'," he said. | "The government needs to be bold in helping private sector employers so they can consider new ways to boost pension savings over the mid to longer-term so public sector pensions are not 'far better'," he said. |
| "A more level playing field between private and public sector pension provision is clearly a sensible aim but it is possible that the current government's attempts to achieve this have already been undermined by the seismic collapse of private sector pensions and, in both sectors, it seems probable that the later the cure the stronger will have to be the medicine." | "A more level playing field between private and public sector pension provision is clearly a sensible aim but it is possible that the current government's attempts to achieve this have already been undermined by the seismic collapse of private sector pensions and, in both sectors, it seems probable that the later the cure the stronger will have to be the medicine." |
| A spokesperson for the Department for Work and Pensions said: "Automatic enrolment is the most radical action taken by any government to help address the question of saving for retirement. | A spokesperson for the Department for Work and Pensions said: "Automatic enrolment is the most radical action taken by any government to help address the question of saving for retirement. |
| "It will enable millions of people to save, many for the first time. | "It will enable millions of people to save, many for the first time. |
| "We will continue to work with industry as we bring this forward as it is in everyone's interest to help people save for their retirement." | "We will continue to work with industry as we bring this forward as it is in everyone's interest to help people save for their retirement." |