The survey has revealed that 57% of final salary schemes are closed to new members and a further 24% are also closed to future accrual, leaving just 19% open to new members. Career Average Revalued Earnings (CARE) schemes are not far behind, with only 21% open to new members.
The survey, which covers 170 schemes, is based on publically available data up to 31 October 2014 and focuses on scheme type, asset allocation, investment performance, deficit contributions and adviser fees.
Other results from the survey show:
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75% of schemes have a deficit on their company accounting basis, unchanged from last year.
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The average annual employer deficit contribution was £94m, but ranged from £7m to £400m.
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The average 3-year investment return was about 8.5% per year (for end dates ranging between March 2013 and March 2014), and the 5-year return was about 9.5% per year. These returns were significantly greater than the 1-year return which was around 5.5%.
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The average PPF levy paid was £3.2m.
Andrew Vaughan, Partner, Barnett Waddingham said:
“Many pension innovations stem from big schemes and work their way through to smaller schemes over time, as the ideas turn into reality and become more refined and accessible. Asset backed contributions, pension increase exchanges, and normal pension ages linked to longevity improvements are recent examples.
“The last year has seen a number of the schemes covered by our survey undertaking bulk annuity or longevity transactions. Our research shows how these schemes are maturing quickly which should prompt greater activity in this area in future.”
The full survey can be viewed below
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