The amount transferred out from pension schemes spiked in 2018, with many schemes seeing three times as much money leave than in the year before, according to consultancy Barnett Waddingham.
The annual survey of 250 DB schemes in the UK, with assets of more than £1bn, found that up to September 30, 95 per cent of DB schemes saw transfers increase, with a third seeing a 200 per cent growth in the value transferred out in the year.
The share of schemes seeing this level of growth in transfers increased from 7 per cent in 2017 to 33 per cent in 2018.
However, there are signs transfers have already peaked. In 2018 the value of funds transferred out amounted to £33bn - £3.9bn less than the £36.9bn recorded in the year before, according to Office for National Statistics figures.
The survey also showed that only half of final salary schemes remain open to future accrual of benefits, down on last year’s 57 percent, and just 3 per cent were open to new joiners, showing the continued decline of DB pension provision.
Andrew Vaughan, partner at Barnett Waddingham, said: "Companies have clearly decided that the future of pension provision lies away from DB pensions, but what does that actually mean for those companies managing a legacy DB pension scheme?
"The focus of companies should now be shifting to the endgame for their DB pension scheme - defining an achievable target and a clear strategy for how they are going to get there successfully."
Of the companies that moved away from final salary schemes, some have offered members career average revalued earnings (Care) benefits instead. However, only 21 per cent of the 33 Care schemes remain open to new members.
Mr Vaughan said: "The UK’s largest schemes will again be leading the way in developing innovative strategies to manage the final chapters of DB pension provision, with the smaller schemes following suit.
"Efficient risk management of DB schemes over their remaining lifetime will now be the primary objective for companies – a stark contrast from the original purpose of operating a DB scheme."
amy.austin@ft.com
