LONDON — The percentage of U.K. companies operating defined benefit pension plans that are open to new members fell to 38% in 2004 from 56% in 2002, according to a study by Mercer Human Resource Consulting.
In addition, 12% of the companies whose plans are still open intend to close them to new entrants, according to the survey of 1,823 U.K. companies, which was conducted in March. And 15% of that group said they had reduced benefits for future service or intend to do so.
Peter Bowers, worldwide partner at Mercer in London, said employers have been moving away from defined benefit plans for several reasons.
Reduced investment returns have increased the deficits of many plans, he said, and the cost of providing defined benefit plans has been increasing as people live longer and bond yields have declined.