Fall in members of final salary pension schemes in the private sector – LGPS a different story‏

While People Management reports that there has been a further decline in the number of people belonging to defined benefit pension (final salary) schemes in the private sector, the LGPS remains strongly cash positive.

This follows the publication of Office for National Statistics 2008 Occupational Pension Schemes Survey which found there were two million fewer people in private defined benefit (DB) schemes in 2008 than in 2000. In 2007-8 alone, the number of members fell by 100,000 www.statistics.gov.uk/pdfdir/ops1009.pdf

This decline is due to scheme closure to new entrants. Since 2000 the numbers participating have fallen due to the closing off of the schemes combined with retirees.

Comparisons with the public sector final salary pension schemes will invariably be made by politicians and the tabloid press. However, LGPS membership has continued to grow because over the past decade employment has grown and there have been no scheme closures.

The contributor membership of the LGPS has increased from 1.362m in 2000 to 1.685m in 2009. The LGPS is strongly cash positive, for example over the last three years (in England) LGPS has had an income in excess of its costs of more than £4bn a year. The scheme is clearly at no immediate risk of failing to meet its annual liabilities.