Final salary schemes escape death sentence

Final salary pension schemes should not be condemned to death according to a "court case" in Edinburgh at the end of last month.

Benefits consultants William Mercer organised a "hearing" attended by over 50 local employers to assess final salary schemes in the light of increasing costs and the burden of regulation.

Jim Doran of William Mercer said that the "not guilty" verdict was based on the fact that "final salary pensions continue to be effective as an employee benefit and that their cost volatility can actually be controlled." In contrast other types of pension transferred the financial risks from "employers to employees who are less well equipped to manage them."