£2bn needed for pension scheme rebates

A paper published by consulting firm Watson Wyatt, finds annual compensation paid offered to firms for contracting out needs to increase by 25% going up to as much as 50% by 2007, doubling the current figure of £3bn to £5bn. Watson Wyatt argues the figures can be justified following poor investment returns and the fact people are expected to live several years longer, extending the age at which people are contracting out in final salary schemes, with most schemes closing to new entrants. The research entitled ‘Taking out a contract on contracting-out’ conducted by Nigel Brodie, senior c...