The report shows the key factors forcing employers to consider change to both defined- contribution and defined-benefit schemes are risk (68%), the need to reduce cost (60%) and legal issues coming out of the March 2009 Budget (45%).
In the Budget, the chancellor, Alistair Darling, announced the Government will remove the higher-rate tax relief on pensions contributions. As a result, PwC found 77% of employers claim this has reduced their motivation to provide workplace pensions.
As many as 96% of employers think defined-benefit pension schemes are unsustainable and, of the 17% still providing defined-benefit schemes, 74% are considering ceasing future accrual for their employees.
Almost nine out of 10 employers (88%) think the public sector has an unfair advantage in being able to offer quality defined-benefit schemes and 92% think the pressure on those still offering this perk to remove it will increase.
Marc Hommel, partner and UK pensions leader at PwC, said: "Fewer than one in 20 employers expect their defined-benefit pension scheme to be open to new members in five years' time and only one in five are saying they will not freeze future benefit accrual for existing members - potentially leaving UK businesses with a legacy of ‘zombie' pension funds.
"Future generations will have to do far more for themselves relative to those people who have been lucky enough to belong to a fast-disappearing, defined-benefit scheme.
"Pensions apartheid is upon us, with a growing gap between the relative generosity of the public sector and the intention of more than a third of private sector employers to provide the bare minimum under the 2012 auto-enrolment pension requirements."
Cost, risk and legal developments force 96% of employers to change pension arrangements
More than nine out of 10 employers (96%) are planning to make changes to their pension provision, according to a new report from PricewaterhouseCoopers (PwC).
