Contribution rates for U.K. defined contribution plans remained stable during the COVID-19 pandemic despite concerns over plan sponsors' financial stability, according to an annual survey of FTSE 350 companies by Willis Towers Watson.
U.K. DC plans that offer a match continued to provide more than 17% of a combined employee and employer rate in 2021, while non-matching plans' contributions rates were under 11%, in line with 2019 and 2020 levels, the FTSE 350 DC Pension Survey 2021 showed.
"There was concern this year we might see a reduction in benefits and commitment as organizations grappled with maintaining financial stability and workforce planning, Gemma Burrows, director in Willis Towers Watson's retirement business said in a news release accompanying the survey. "Far from this, what we see in this year's results is a compelling desire for organizations to improve member outcomes and enhance the support that is provided to them."
The survey also found that some 16% of plans intend to increase the contribution rate in the short-term, while none expect contributions to be reduced, WTW noted. The number of employers offering a plan design allowing particpants to redirect some savings to alternative savings vehicles could also triple — to 31% — over the next two years, according to the survey.