ACA survey looks into workplace retirement solutions

Many British private wealth management customers remain concerned about how they will save for retirement, new figures indicate.

A report from the Association of Consulting Actuaries (ACA) shows that workers are worried about their pensions, as companies continue to close their defined benefit schemes to new members.

The analysis found that 87 per cent of these schemes are now shuttered.

A survey of employers conducted by the ACA also showed that 76 per cent felt that their employees were ’uncomfortable’ with taking on an alternative defined contribution-style workplace plan.

Defined benefit differs from defined contribution in that it offers stronger guarantees of a retirement income.

However, with these guarantees come higher costs for the provider, meaning that many employers are closing the schemes down.

Alternative ways of funding a retirement include private pensions and individual cash savings and investments.

Commenting on the findings, ACA chairman Keith Barton said: ’It is very clear from the survey that employers do not think employees want to take on the risks inherent with defined contribution.

’If we are to preserve as much private sector defined benefit provision as possible then the government must act during 2010 to free up pension designs, so employers can better control defined benefit costs whilst continuing to provide a more stable pension outcome than is possible with defined contribution.’ADNFCR-2318-ID-19340181-ADNFCR