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27-Aug-08 11:15 [Pensions]
Falls continue for defined pensions Final salary benefit pension schemes are to see a greater fall soon, with a growth in scheme closures to existing members as large employers look to lose their remaining liability, it has been revealed.
The Financial Times reported the results of a survey taken out by Watson Wyatt which revealed a "rapid decline" in pension services after 134 companies, including 30 FTSE 100 businesses, were polled.
It noted that more companies were taking this action due to the "cost of honouring the promise", in part due to both tighter regulations, rising life expectancy and a change in accounting rules.
David Robbins, the senior consultant in charge of the survey, noted that at least seven companies remained "committed" to the long term future of defined benefits but the decline will continue.
He added: "As the number remaining in a scheme fall, it becomes easier for a company to close the scheme to existing members."
Business Week today highlighted the changes in schemes provided by American companies, with defined benefits dropping from 73 per cent of businesses in 1996 to just 21 per cent now.
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