Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • December 2014
12

Membership of DC pension schemes surpasses DB for first time

Open-access content 2nd December 2014

Active membership of defined contribution pension schemes has outstripped membership of defined benefit schemes for the first time, the National Association of Pension Funds’ annual survey has found.

Publishing results of its 40th annual survey workplace pension schemes, the NAPF highlighted some of the major changes that had taken place over the last four decades.

For example, the basic state pension in 1975 was £13.30 and is now £113.10. Male life expectancy at age 65 was 13.3 years and is now 22.0 years, while for females, life expectancy at 65 has risen from 17.6 years to 24.5 years.

One of the more obvious trends had been the shift from DB to DC schemes, the NAPF said.

'The decline of defined benefit has been well documented as schemes have gradually closed to new members and new contributions from existing members. This year's survey shows that trend continuing with 39% of DB schemes fully closed compared to 34% last year,' said Graham Vidler, director of external affairs at the NAPF.

'That said, DB schemes are still very much the dominant investment force in UK workplace pensions, with our survey showing on average £2.3bn of assets in private sector DB pensions schemes and £0.25bn in DC pension schemes in 2014.'

The survey found that 50% of DB schemes remain open to future accrual, but only 8% of private sector DB schemes are open to new members compared to 12% in 2013.

The average pension paid to a DB scheme member was £8,071, up slightly from the £8,010 paid out last year.

Average contributions continued to slow, hitting 11.7%, down from 12.5% last year. This consisted of 7.6% in employer contribution and 4.1% from employees.

Commenting on wider changes, Vidler said: 'In 40 years - less than a working lifetime - we've seen massive changes in the pension landscape. Two-tiers station pensions have been introduced, radically reformed and then abolished. Contracting out was in - and now is out. Scheme memberships was compulsory, the voluntary and now automatic. Stakeholder pensions and annuities both became a significant part of mass market retirement provides and both are now in decline.'

He added that the good news was that participation in workplace pension was up and repeated the NAPF's call for the establishment of an independent retirement savings commission to ensure future pensions policy was subject to impartial scrutiny.

This article appeared in our December 2014 issue of The Actuary.
Click here to view this issue
Filed in:
12
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Capital Project Actuary

£500 - £850 per day
Reference
118964

Systems Actuary

London (Central)
£90,000 to £115,000 plus bonus and package
Reference
118963

Qualified Reporting Manager

London (Central)
£Upon Application
Reference
118948
See all jobs »
 
 
 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200