Final salary pensions

Final salary pensions in the private sector have closed their doors to new staff at the fastest rate on record, according to a survey by the National Association of Pension Funds (NAPF).

Just 13% of final salary pensions were open to new joiners in 2012, a drop of a third from 19% in 2011. And it is the steepest fall since comparable data began in 2005, when 43% were open.

The latest NAPF annual survey also revealed that these “defined benefit” pension funds are increasingly closing to the workers who are already in them.

The number that shut their doors to existing staff climbed to 31% in 2012, a hike of over a third from 23% in 2011.

Joanne Segars, NAPF chief executive, said that “pressures on final salary pensions have proven too great for many businesses”.

She added: “The growing liabilities fuelled by quantitative easing will have been a factor behind the record hike in closures.”

Segars went on to say that auto-enrolment pensions will come to dominate in the private sector.