Health benefits undermined by switch to DC

A survey of 1,800 pension DC schemes nationwide has found just 41% provide some form of income protection, and just 13% provide an ill health pension. These benefits are far more common in defined benefit schemes, many of which have been shut to new members in the past few years. DB schemes could afford to pay these sorts of benefits because of the shared pot of money created by the typical scheme. DC schemes, on the other hand, force the cost of such benefits onto individual pots, which can rarely afford them, hence they are cut, says John Matthews, European partner at Mercer. ...