Private sector pension provision has been in steady decline
Only 35% of workers in the private sector paid into a company pension fund last year, figures show.
The figure was down from 37% in 2008, and lower than the 45% recorded in 1999, according to the Office for National Statistics (ONS).
The government hopes to reverse this trend when it phases in the National Employment Savings Trust (NEST) pension scheme from October 2012.
Most of the employees were paying into defined contribution schemes.
Only 12% of the private sector staff were still paying in to traditional final-salary schemes, compared with the 23% paying in to defined contribution schemes.
Pension consultants Towers Watson said the figures reflected a decade of decline company pension schemes.
"For the foreseeable future, the only way is down when it comes to the number of private sector employees with defined benefit pensions," said Mark Duke of Towers Watson.
"Staff turnover is eroding the number of employees in defined benefit schemes that no longer admit new members, and large deficits have persuaded more companies to force the pace of change by closing their schemes to existing members too," he added.
Most final-salary schemes are closed to new joiners and a small but increasing number are being closed to their existing staff as well.
Typically the staff are offered membership of a defined contribution scheme instead.
This builds up a pension pot which is then used to buy an income in retirement.
There is no guarantee of a particular level of pension related to either earnings or length of service.
The scheme members bear the risk of poor investment returns undermining the size of the pension they hope to earn.
"More people are going to have to get used to the idea that the ups and downs of financial markets will have a direct impact on their retirement income," said Mr Duke.
Employers usually pay far less into defined contribution schemes on behalf of their staff then they do when paying into a final-salary scheme
Recent ONS figures showed that in 2008 the average private sector employer contributed 14.6% of salaries to their open final-salary schemes and 18.1% for their closed ones.
When it came to defined contribution schemes, just 6% of salaries were paid in to open ones while closed ones attracted employer contributions worth 7% of salaries.
The NEST will be a top-up to the main state pension scheme.
Employers will be forced to enrol their staff in either the NEST or a company scheme that is at least of equivalent value.
Unless they chose to opt out, staff will be compelled to contribute 4% of earnings between £5,035 and £33,540 while employers will, in due course, have to pay an additional 3%.
An extra 1% will be contributed via tax relief.
However, the scheme will not come into full effect for some time as it is being phased in over a number of years.
It will not be until 2016 that all employers are required to enrol their staff in NEST, or an in-house equivalent, and it will not be until 2017 that all employers have to start paying their full contributions.