More than 40% of smaller employers in the UK would consider closing their existing pension schemes for the potentially less-generous Personal Accounts, a study suggests.
According to the study by the Association of Consulting Actuaries (ACA), 41% of firms with fewer than 250 employees may opt for the Government-backed scheme.
Additionally, three-fifths of employers will review their pension arrangements ahead of the introduction of auto-enrolment and Personal Accounts in 2012.
The trade body's second pension trends report - which surveyed 309 employers with total scheme assets of over £138bn - found 59% of respondents, including 86% of smaller employers, were set to review pension arrangements ahead of 2012 reforms.
Only one-third of all employers had budgeted for the increased costs arising from the reforms - and just 16% of smaller employers.
The ACA says "middle way" pension reforms would help schemes from 2012, adding it would call for a delay in introducing Personal Accounts and auto-enrolment should these reforms not be implemented.
"The message is clear - good schemes are falling under threat from these well-intentioned reforms," ACA chairman Keith Barton says.
"This will mean an increasing number of employees currently in good schemes, and those joining from 2012, are set to receive pensions that fall far short of their needs."
He adds: "This is why we and others have called for legislative changes to allow new ‘middle way' pension designs to prosper, to give employers new options well ahead of 2012 to provide or to continue to provide quality schemes, but schemes where employers' costs can be capped when economic and demographic changes occur."
