Employee reward and benefits news
Final salary pension schemes are 'dead'
Final salary pension schemes are dying out and it is likely that people in private sector employment will not have access to such offerings in the very near future, one expert believes.
Gordon Forbes, managing director of Caledonia Asset Management, made his comments following recent revelations from the Pension Protection Fund, which discovered that the total deficit of final salary pension schemes in deficit in February 2010 has improved to £79.5 billion from £102.8 billion at the end of January 2010.
It comes after the PPF's report a year earlier, which notched the aggregate deficit of all schemes in deficit at £218 billion.
Mr Forbes said that the problem with some larger schemes is that there are too many advisors and it results in a "massive cost", particularly when added to fees for trustees and members.
He concluded: "I think we will probably end up in a situation like they have in Australia where the only final salary pension schemes are government officials, police force, fire brigade.
"Nobody has a final salary scheme there anymore - that's the way we are going."
Posted by Elizabeth Mewes
