Employees should be asked to opt out of final salary pension schemes or risk losing their jobs, a leading pensions adviser said this week.
Des Hamilton, technical director of the Pensions Advisory Service, said most final salary pension schemes are in deficit, and the recession is an ideal opportunity for companies to encourage their employees to opt out of the plans.
Companies should be frank with employees if their pensions deficit risks bankrupting the company, Hamilton said.
“In the present climate employees will no doubt choose their job over their pension,” he added.
The “demise” of final salary pensions is set to continue, Hamilton claimed, and the schemes will die out completely within a decade.
A recent survey by KPMG found FTSE 100 companies are going to face spending more on pensions payments for past employees than for current workers.