Defined contributions (DC) pension schemes are offered by four out of five FTSE 100 companies, according to new research.
Watson Wyatt found the average maximum employer contribution into a FTSE 100 DC plan to be 8.5% while contributions from employees topped up the total fund to 13%.
Varied pensions approaches included design structures, contribution rates and structures, investment options and employee take up rates.
Kevin Stratford, a partner at Watson Wyatt commented:
“Nearly all these DC schemes were set up over the last decade with the majority in the past five years.
“Initially, they had few members and little in the way of assets and so most employer and trustee attention understandably continued to be directed at the final salary pension schemes they often replaced for new employees. But now many DC plans have significant numbers of members with sizeable assets under management.”
Stratford went onto say that growing membership of DC schemes together with forthcoming regulations may trigger employers into reviewing their pension plans in the next year.
“Plan governance isn’t just about box-ticking, it is about best practice and ensuring that your plan remains fit for purpose,” he said.