Connected Research

Union policy research in the 21st century

DC not making up for DB

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It’s often assumed that the declining private sector provision of defined benefit schemes is compensated for – at least, in terms of coverage – by defined contribution schemes. Research published today show that even this limited scenario is not the case, with the falling percentage of the private sector workforce covered by DB schemes meeting with a percentage of the population covered by DC schemes which is, at best stagnant. More than three in five private sector workers have no pension at all.

At the same time, the percentage of the private sector in DC schemes which have an employer contribution rate in excess of 8% – i.e. which operate at the sorts of levels which might deliver a comparable pension to DB schemes – is a little over 7%. So, only around one in three members of DC schemes are earning a pension which might be assessed as adequate.

The TUC Press Release announcing the figures carried some useful statistics, which I have graphically presented here:untitled

The action that Congress will be calling for this week on quality pensions is timely; indeed, it is overdue. As the motion says, defending quality pensions isn’t about attacking the pensions of public sector workers; it is instead about trying to do something that will ensure that workers in the private sector gain access to pensions better than they currently receive – ones which will do little more for them in retirement than leave them relying on the state.

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Written by Calvin

14/09/2009 at 5:13 pm

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