A change in direction

Money purchase schemes are slowly but surely replacing the traditional final salary schemes, but just how suitable will they prove to be?

The pensions landscape is changing and the familiar final salary scheme is being replaced by cheaper money purchase schemes. This begs two key questions: how suitable are money purchase pensions for future pensioners, and how easy will the transition be? Figures from the National Association of Pension Funds (NAPF) show a continuing trend over the period between 1996 to 2001 of a shift from final salary to money purchase schemes. In each of these years the number of pension schemes switching from final salary to money purchase structures has outnumbered, or in 2000 equalled, those maki...