Active participants of defined contribution plans in the U.K. outnumber active participants of defined benefit funds for the first time in the 40 years of the National Association of Pension Fund's annual survey.
The survey, which has tracked workplace retirement plans since 1975, said that, on average, trust-based DC plans now have 15,000 active participants, compared to just 4,500 active participants in the average corporate DB fund.
This shift is not altogether unexpected as most NAPF members have embraced automatic enrollment, said Graham Vidler, director of external affairs at the NAPF, in a statement accompanying the survey. It does, however, underline the rapid growth in the number of savers into workplace pensions that automatic enrollment has generated. We expect to see a further major shift in this area in our 2015 survey results.
The 2014 survey received responses from 250 organizations, representing 840 plans and £719 billion ($1.1 trillion) in assets. In contrast, 771 organizations responded in 1975, representing 976 plans and £8 billion of assets. This year, plans were a mix of DB and DC, whereas 1975's respondents represented only DB funds.
Life expectancy also has changed dramatically: In 2014, a man age 65 can expect to live a further 22 years, compared with 13.3 years in 1975. A woman age 65 in 2014 can expect to live a further 24.5 years. In 1975, that figure was 17.6 years.