Released on: December 1, 2007, 3:56 am

Press Release Author: Iain Martin

Industry:

Press Release Summary: Half of employers with defined benefit (DB) schemes could be
closed to future accruals by 2011, trebling the number of sponsors that have already
done so. This is according to research released today by Aon Consulting, a leading
pension, benefits and HR consulting firm.

Press Release Body: Half of employers with defined benefit (DB) schemes could be
closed to future accruals by 2011, trebling the number of sponsors that have already
done so. This is according to research released today by Aon Consulting, a leading
pension, benefits and HR consulting firm.

A seventh of DB pension schemes (14%) are closed to future accruals. However, those
closing to accrual in 2006 included a number of household names, and this is
expected to make this 'nuclear option' far more acceptable for others to follow.

Paul McGlone, principal and senior actuary at Aon Consulting, said: "We expect that
the trend to close to accrual will follow the earlier trend to close to new
entrants, but the question is how quickly. The average period between closing to
new entrants and closing to accrual is currently around seven years. However we
believe that this could accelerate, and we believe that 2007 will be a tipping point
for closures to accrual."

While closures to accrual are expected to accelerate, other changes to DB scheme
design have slowed. The survey shows a 20 percentage point fall in the proportion
of defined benefit (DB) pension scheme sponsors contemplating changes to scheme
design within three years - from 49% in 2005 to 29% last year. This is partly due
to employers wanting a period of calm after recent changes, but is also a reflection
of the increasing acceptance of the option to close to accrual.

For those sponsors resisting closure, there are increasingly interesting options
available for their DB schemes, with issues such as hybrids and contracting back
into the State Second Pension scheme being two options actively under consideration
by many.

Mr McGlone continued: "While costs, volatility and a harsh legislative environment
will remain drivers for further change in DB schemes, it will be interesting to see
if clever redesign can deliver new versions of the DB model that become affordable
alternatives to final salary and withstand the ongoing pressure to close."

Notes to editors:

The research surveyed 150 UK companies operating defined benefit pension schemes
between November 2006 and February 2007.

Of the companies surveyed:

* 26.5% operated schemes that were open to new members and accrual
* 59.1% operated schemes that were closed to new members but continued to accrue
benefits
* 14.4% operated schemes that were closed to new members and accrual

About Aon Consulting

Aon Consulting is a leading human capital consultancy, helping organisations of
every size to attract and keep the employees they need. We advise on all aspects of
employment, including health-related insurance and risk; employee compensation and
pensions; human resource strategy planning; job design and change management; and
staff assessment and legal issues. Aon Consulting is a division of Aon, one of the
UK's largest insurance brokers and providers of risk management services and a major
force in reinsurance and the UK human capital consulting market. Aon Consulting
Limited is authorised and regulated by the Financial Services Authority.classic
car insurance


Aon UK is ranked by A.M. Best as the number one global insurance brokerage based on
brokerage revenues and voted best insurance intermediary, offering classic
sports car insurance, high value home insurance, entertainment and media
insurance and construction site insurance.


Web Site: http://www.privateclients.aon.co.uk/privateclients/microsites/household/

Contact Details: directory@vandelay.co.uk