Crunch hitting pensions

Huddersfield Daily Examiner (Huddersfield, England), June 24, 2009

THE economic downturn is accelerating the shake-up of company pension schemes with 96% of firms planning to change the pension provision they offer, latest research shows.

Changes are planned to both final salary and defined contribution schemes as 68% of companies try to cut their costs, according to PricewaterhouseCoopers.

Three-quarters of companies said proposed changes to pensions tax relief for high earners, announced in the Budget, had reduced their motivation to provide any sort of pension scheme.

Around 96% of firms said they thought final salary pensions, under which employers guarantee the size of the final pension, were now unsustainable, with three-quarters of firms saying they were considering closing their final salary schemes to existing members..