Cost of company pensions 'has risen substantially'
The costs associated with sustaining a company pension scheme have risen "very substantially", according to one expert.
Des Hamilton, technical director for the Pensions Advisory Service, has claimed that the funding of company pension schemes has become increasingly difficult in recent years as people have started to live longer throughout the UK.
Mr Hamilton insists that this has been partly to blame for the decline in prevalence of occupational pensions and the fact that many such schemes have now been closed to new members or shut down entirely.
"When the schemes were put in place they were based on an expectation of mortality which was a lot lower than it is now," he said.
"In recent years the institute has woken up to the fact that people are living longer and that's fed through into the cost of these schemes rising very substantially."
A majority of respondents to a recent business-focussed survey carried out by the human resource firm Mercer said they had lengthened the mortality estimates on which their company pension schemes were based.
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