Almost 100% of new employees joining FTSE 350 companies are enrolled into a defined contribution plan, said Willis Towers Watson.
The consultant found that across 259 U.K. listed companies, 98% of employees are offered DC plans. It also found the use of multiple employer DC plans, known as master trusts, has doubled since 2015 to 15% from 8%.
“However, (there is) an appetite to look at ways of making arrangements work better, particularly in identifying the best vehicle for delivering DC, restructuring contributions to allow wider savings options, improving investment strategies and introducing enhanced member information and support around adequacy and retirement options,” said Richard Sweetman, senior consultant at Willis Towers Watson, in a news release accompanying the data.
Within FTSE 100 companies, average contributions into DC plans have quadrupled since 2009, and average assets held in those plans have increased sevenfold over the same period, said the update. Specific data was not provided.
More than half — 54% — of FTSE 100 firms still offer a defined benefit fund to existing participants, but this has declined from 84% in 2009. Just 27% of FTSE 250 firms still have open DB funds for existing employees and 42% have frozen their DB plans, up from 37% in 2015. Of FTSE 100 companies, 37% are frozen, up from 29% in 2015.
Contribution rates to DC plans have remained broadly stable since the introduction of automatic enrollment in 2012, with FTSE 100 employers committing up to 10% of pay.