Survey says final salary pension closures have doubled

The number of UK firms that have closed their final salary pension schemes has almost doubled in the past year, according to the main industry body the National Association of Pension Funds (NAPF).

The NAPF's latest annual survey covers over 970 major pension schemes, with combined assets totalling some £420bn.

Its main finding was that 84 companies had closed their final salary schemes - where the pension at retirement is linked to pay - to new members, compared with 46 the year before.

It also highlights the gap between what employers contribute to final salary schemes and what they pay into money purchase schemes - where the pension at retirement is not guaranteed but depends on investment returns. The average contribution by private sector employers to a final salary scheme is over 12%, compared with 6% for money purchase schemes.

According to NAPF, many schemes continue to be well funded - 24% had taken contribution holidays in 2002, though this is down from 34% in 1997.