The pain felt by ordinary workers over the closure of final salary schemes is spreading higher up th...
The pain felt by ordinary workers over the closure of final salary schemes is spreading higher up the food chain according to new research from Mercer Human Resource Consulting.
It says top executives should now expect to see their generous pension benefits severely eroded by the change going on as companies wake up to the fact they can save large amounts of money by putting everyone into defined contribution schemes.
FRS17 and other rules are making it harder for the true cost of executive pensions to be hidden in accounts, which is putting more pressure on remuneration committees to cut back on excessive pensions contributions, Mercer adds.
"Companies are starting to recognise the high cost of good-quality final salary pension promises, " says Mercer partner Charles Cowling.
"In future it's likely that any cutbacks on pension costs will apply equally to executives as to the rest of the workforce."
"Employers now realise the need to focus on performance-related pay, and the comfort blanket of a generous pension does not deliver improved performance."
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