Engineering firms step up final salary closures

A survey of over 500 manufacturing companies by the Engineering Employers' Federation (EEF) and Aon Consulting published last month found 202 employers had closed their final salary schemes and over half (112) had done so in the last three years.

The survey also found 80 employers had closed final salary schemes to existing members and 54 reported cuts to the final salary benefits of existing members.

Respondents were asked for their views on the issue of compulsory contributions. Although over half actually backed compulsory contributions for employers, there was opposition to the TUC's proposal for a minimum employer contribution of 10% of earnings with only a third indicating support even if it was phased in over 10 years.

Just under two-thirds of employers (63%) supported a compulsory employer contribution rate of between 4% and 6%.

Occupational pensions provision and policy, EEF/Aon Consulting Survey 2002, free from www.eef.org.uk or tel: 020 7222 7777