This is the remaining ongoing DB pension provision in the UK, research from JLT Employee Benefits has found.
According to the research only 55 FTSE 100 companies are still providing more than a handful of current employees with DB benefits.
Of these, less than a quarter are still providing DB benefits to a significant number of employees, defined as incurring ongoing DB service cost of more than 5 per cent of total payroll.
Charles Cowling, director of JLT Employee Benefits, said: “Tesco, United Utilities and the Royal Mail are just a few more major employers recently looking to close the doors of their DB schemes to all employees for future benefit accrual.
“Changes in investment strategies also support this trend, with increasing evidence of end-game planning as LDI, pension buy-outs and de-risking of pension schemes all become more prevalent.
“All this comes against a backdrop of significant reforms in UK pensions. Tax changes and the end of contracting-out, as well as soaring costs, are encouraging employers to look elsewhere when designing remuneration strategies for employees. Sadly, this does not bode well for long term retirement savings in the UK.”
Adviser view
Jeremy Edwards, associate partner at Cambridgeshire-based Martin Redman Partners, said: “20 years ago all you had to do was follow the herd, join the company’s pension scheme and you would have a reasonably well-off retirement, but these days there can be no expectation of your pension being enough and that’s one of the scariest things that has happened.”
