The number of people contributing to pension savings through defined contribution plans – either company schemes or personal pensions – looks set to overtake the number of those who are contributing to defined benefit pensions run by their employers.

By contrast, 7.9m workers were saving through employer-sponsored defined benefit plans, most of which offer retirement income linked to final salary regardless of investment returns. Within this group about two-thirds work for the public sector, a development which looks increasingly likely to become the subject of political debate as private sector employers withdraw from the risks this type of retirement promise can bring.

The ONS said that the move to auto-enrolment of employees in defined contribution-type plans from 2012 onwards was likely to accelerate the predominance of these schemes
Published in Financial Times :  June 23 2009 12:01

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