A recent report conducted by Watson Wyatt suggests that about half of employers with final salary schemes expect to close them within the next 3 years, with only 2% of such schemes remaining open to new members.
The big public sector schemes such as local Government, Teachers and NHS Pension Scheme are gradually evolving, restricting new membership, but are unlikely to be closed to existing members due to the political fall-out that would inevitably follow. Businesses in the private sector are plainly running for the door. Regrettably little can be done to turn this around – King Canute comes to mind – the days of the final salary scheme in the private sector are certainly numbered, as for those within the public sector, at some point, there is likely to be a significant battle on this one, but none of the political parties have the appetite for the inevitably sanguine chaos that would occur. Public sector schemes will live to fight another day, but for how much longer is anyone’s guess. Mine is in about 19 years (2028).
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