Many final salary pension schemes to close

Fri, 23 Jan 2009

According to a recent study by the National Association of Pensions Funds, as many as 25 per cent of major private sector companies could slam shut their final salary pension schemes to existing members.

Members of this type of lucrative pension scheme are instructed that they cannot contribute to their pension scheme any longer, and that they should look for another scheme.

Already, over eight per cent of final salary pension schemes in the private sector are closed to new members. Pensions experts indicate that this type of pension change was certain in adverse economic circumstances.

Former UK CEO of Prudential, Mark Wood, was reported as saying: "Over the next few years the onus will be on personal responsibility rather than the company taking responsibility. People will have to take guidance on how much money to set aside. With low interest rates, the amount of money you need to pay into a pension is far greater than it was a year ago."
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