EXCLUSIVE: Group personal pension (GPP) plans continue to be the most commonly offered primary pension scheme, according to research by Employee Benefits and Barnett Waddingham.
The Employee Benefits/Barnett Waddingham pensions research 2018, which surveyed 246 respondents and was published in December 2018, found that more than half (55%) of employers provide GPP plans as their primary pension scheme, showing a 10% increase since 2017.
Trust-based defined contribution (DC) plans have remained popular, offered by 14% of employers in 2017 and 2018. Master trust schemes such as the National Employment Savings Trust (Nest) are offered by 8%, which is similar to the 9% that did so in 2017.
Defined benefit (DB) schemes, on the other hand, are dwindling. Final salary DB schemes that are closed to new members are provided by 3% of respondents this year, showing a 4% decrease since 2017; likewise, career average DB schemes are the primary pension arrangement at 3% of organisations surveyed in 2018, compared to 5% last year.
Around a third (36%) of respondents offer a secondary pension scheme for their employees. For 11% of employers, this comprises a final salary DB scheme, which is closed to new members, while 7% operate a final salary DB scheme that is closed to future accrual. A GPP is offered as a secondary pension arrangement by 8% of respondents in 2018, and 3% provide master trusts.
Of those respondents who operate a DB arrangement, 27% have no plans to make changes to the scheme or how it is managed, but 16% are looking to close it to new entrants and future accrual, while a further 16% are currently devising a liability management strategy.
More than one in 10 (11%) respondents wish to close their DB scheme to new entrants, but keep it open to future accrual.
Auto-enrolment has ensured that pension membership remains high. In 2018, 48% of respondents have 90% or more of their workforce as active members of their primary pension scheme, while 22% have between 80% and 89% of their staff as active members.
Download the full Employee Benefits/Barnett Waddingham pensions research 2018 report