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EDITIONS
 Friday, 20 December, 2002, 10:42 GMT
Pensions now 'more at risk'
Factory employees leaving work
Workers still face pension uncertainty
Company final salary pension schemes could face accelerated closure as a result of government policies, a leading industry figure has warned.

Peter Tompkins, vice-president of the Institute of Actuaries, said the government's decision not to change the rules governing the closure of schemes could give firms a window of opportunity to act now to cut costs.

The government in a sense has opened a window of opportunity for companies who are thinking of making changes, or worried they may have to

Peter Tompkins, vice-president of the Institute of Actuaries

Final salary schemes - often considered the most lucrative pension an employee can get - have fallen victim to cost cutting measures by UK companies.

Since June, final salary pension schemes have been closing at twice the rate of last year.

UK PENSIONS IN CRISIS
Key pension facts and figures at a glance

Just under half of all final salary schemes run by private sector employers surveyed by the Association of Consulting Actuaries are now closed to new entrants.

Scheme wind ups

Even more alarmingly, some schemes have been wound up by employers.

Under current rules, pension schemes that are wound up pay out to members that are already retired first and members still in work second.

Maersk, ASW are two of the most prominent examples of pension schemes that have been wound up to the detriment of scheme members still in employment.

Closing time

In its green paper on the future of UK pensions, the government said it would look at greater consultation and protection for workers when a scheme is wound up.

But these measures are to be consulted upon as the government does not want to add to business costs as firms were identified as a vital partner in the bid to get workers to save more for their retirement.

"The government in a sense has opened a window of opportunity for companies who are thinking of making changes, or worried they may have to," Mr Tompkins told the Financial Times.


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17 Dec 02 | Business
17 Dec 02 | Business
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