Premier Pension Services Ltd announce the death of final salary pension schemes

Premier Pension Services Ltd announce the death of final salary pension schemes

19th February 2009, London - It is with great sadness that Pension Capital Strategies (PCS) announce the death of final salary pension schemes. They will be mourned by many - but possibly not by those companies that have suffered decades of Government interference and successive legislation, which has increased costs and risks to a level where companies are now saying ‘enough is enough’.

Rob Dales, Director, PCS, says, “The death of final salary pension schemes has often been predicted and the ‘final nail in the coffin’ has supposedly been hammered in many times. But we believe the final, final nail in the coffin for pension schemes (in the private sector at least) is the present financial crisis.

“Faced with ever-escalating costs, and pension scheme liabilities and deficits that have grown out of control, companies are being forced by the present financial crisis to take action. PCS has over 350 clients, and the large majority of these have either closed their pension schemes to all members or are in the process of so doing. We have been taken aback by the number of companies that have come to us in the last few weeks and told us that they need to close the pension scheme to all future benefits.”

In a recent survey of nearly 400 smaller firms, the Association of Consulting Actuaries found that half of their final salary pension schemes were closed to all future benefit accrual. The latest research from PCS reveals that the top 10 FTSE100 companies most at risk from their pension schemes are valued at £72 billion, but have reported pension liabilities of over £150 billion. PCS predict that within two years the large majority of all final salary pension schemes will be closed to all members.

Rob Dales concludes “On the 200th anniversary of the birth of one of the greatest of all Britons - the naturalist and evolutionist, Charles Darwin - it is perhaps fitting that we are reminded that the survival of the fittest is not just a law of nature. Final salary pension schemes in the private sector (the public sector inhabits a different economic

reality) have lost the fight for survival and are no longer fit for purpose. It is with much sadness that we say it is time to turn off the life support machine and allow the patient to die.”

To read the full PCS Alert - ‘We announce the death of final salary pension schemes’ go to www.pensionstrategies.co.uk

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