Although fewer companies are offering DB pension plans, U.K. employers paid record amounts to these plans last year, according to an analysis by Towers Watson on recent Office for National Statistics (ONS) data.
Total employer contributions to self-administered pension funds rose to £45 billion in 2012, compared with £39 billion in 2011.
“Employers are paying more and more money into their DB schemes even though the number of employees still in them is getting smaller and smaller. That these things are true at the same time underlines how the vast bulk of this money is being used to pay off deficits, not to promise new benefits,” said Mark Duke, a senior consultant with Towers Watson.
In February, the ONS data revealed that the proportion of private sector employees still in DB schemes had fallen to 8% in 2012, down from 26% in 2002.