Most major employers with company pension schemes plan to respond to the advent of stakeholder pensions by relaxing their rules on eligibility so they will not need to offer a stakeholder scheme at all. But that does not mean that employers are unconcerned about the costs of pension provision. Nearly one-in-five employers have tightened up their criteria for ill-health retirements in recent years and a similar proportion have replaced their final salary pension schemes with money purchase arrangements for new recruits.

These are among the findings of a survey published today by Incomes Data Services. The results reflect responses from a cross-section of 100 large employers, all of which operate pension provisions of some type for their employees. They show that:

• 21 of the 100 organisations have replaced a final salary scheme with a money purchase plan as the only option for new staff and a further three have moved from a final salary plan to money purchase for existing employees too
• a further dozen organisations are seriously considering closing their final salary schemes to new members
• 17 of the schemes have tightened up their ill-health criteria for early retirement benefits since April 1997
• when pensions sharing on divorce comes into force in December, a third of the organisations intend to insist that those awarded pension credits transfer their benefits out of the corporate scheme, while 25 per cent will allow those awarded credits to be treated as members of the scheme
• two thirds of those surveyed intend to respond to the arrival of stakeholder pensions by widening eligibility of their existing schemes and only 28 per cent say they will designate a contract-based stakeholder provider. A few organisations plan to set up their own stakeholder schemes

The results of the survey form part of a 150-page research report on the changing shape of the pension benefits package, Pension Scheme Profiles 2000/01. It also includes details of the benefits in over 50 pension schemes covering hundreds of thousands of employees, from eligibility to death-in-service benefits, and from contribution levels to the treatment of periods of maternity leave.