Nearly 40,000 quit pension schemes
Some 40,000 people left occupational pension schemes over the past year, as the recession continued to bite, the Pensions Board has revealed.
According to its annual report, the total number of active members in occupational pension schemes at April 2012 was 771,878, a decline of some 38,083 members over 2010 levels. Speaking at the publication of the report this morning, Jane Williams, chairperson of the Board, noted that such a decline was a “serious concern”, given the importance of personal savings to provide for retirement.
With regards to the re-introduction on June 7th of a funding reserve for defined benefit (DB) schemes, Brendan Kennedy, chief executive of the Pensions Board, said that some DB schemes will be forced to close because they can’t meet their funding standard as a result.
“Unfortunately some schemes will close,” he said, adding that it was as yet unclear how many will do so.
DB schemes have until December 2012 to submit funding proposals on how they will tackle their deficits and will have 11 years to make up the deficits. At present, as many as 80 per cent of DB schemes are in deficit, “and in a number of cases, the deficit is substantial” Mr Kennedy noted.
“It is now up to trustees to prepare and submit proposals which will put the finances of their scheme on a long-term stable footing,” he said.
Last year, the Pensions Board prosecuted 26 pension cases, with a further 36 pending for 2012.
“In recent years prosecutions have almost entirely been where employers have deducted contributions from employees’ wages and not passed them on to the pension scheme, that is, they kept them,” Mr Kennedy said.