We have been talking about the UK Defined Benefit Pension Scheme crisis for some months now, and it is becoming increasingly clear that many companies are in difficulty.
The fallout from the current economic financial predicament means that many companies will be forced to close their expensive defined benefit pension schemes. Instead companies will be looking to find cheaper arrangements and slowly ease themselves out of debt.
It is expected that over 50% of UK companies will be forced to close their defined benefit schemes by 2012. Defined benefit schemes mean that a level of pension is linked to your salary and so many companies will have to pull the plug on their schemes.
Defined Benefit Pensions Schemes are being examined in detail by employers who are desperate to manage the risks that their pension schemes are exposed to.
The one million plus employees that are currently in defined benefit schemes will have to rely on defined contribution schemes instead. This means that the employers will directly suffer or benefit at the hands of employer investments and risks.
Equity markets are failing but people are living longer and the new regulations mean that the trend of companies closing their DB schemes is pretty much expected.
Both IBM and BP are closing their final salary schemes for all new employees, whilst Barclays said that they would be freezing the scheme for all British staff.
If you are looking for help with Transferring a Defined Benefit Pension Scheme Grove Pension Solutions Ltd is authorised and regulated by the Financial Conduct Authority and offers specialist defined benefit pension advice if your transfer value is more than £30,000. It is a legal requirement to seek specialist financial advice.