Closure To New Entrants

The future financial wellbeing of past and current staff depends on the stewardship and management of the pension scheme possibly over decades.

When a scheme is open there is an expectation that as members retire they are replaced by younger employees so the average age of the scheme remains reasonably constant which means that the time horizon for investment and for the maturity of the liabilities can be assumed to be very long. As soon as the scheme is closed to new entrants the age profile of the membership becomes fixed and the average age of the membership will increase over time with a commensurate reduction in the time horizon for investments and the maturity of the liabilities.

Consideration needs to be given to other financial implications of such a move. For example, what alternative arrangements to put in place for new employees. This can often result in increased levels of overall contributions.

Our pension consultants have worked with many schemes to discuss the full implications of the options available and assist in the decision making process. This help has been invaluable in ensuring the necessary steps are being taken to maintain the suitability of the investment approach adopted, ongoing pension provision and administration services.