United Kingdom

Aon’s 2022 UK Defined Benefit Pension Design Survey shows continued trend to closure

LONDON, 19 December 2022Aon plc (NYSE: AON), a leading global professional services firm, has released its ‘2022 Defined Benefit Pension Design Survey’, which shows the trends developing among UK defined benefit (DB) pension schemes as the number closing to future accrual continues to increase.

The survey of over 330 DB pension schemes showed that 72 percent are now closed to future accrual. However, in an uncertain economic environment and with a potential recession, it would seem likely that even more scheme sponsors may consider this action.

Key findings

  • 88 percent of companies have reviewed DB benefits in some way.
  • For 72 percent, reviewing DB benefits ultimately resulted in the DB scheme being closed to future accrual – a 4 percent increase from the 2020 survey.
  • Excluding regulated industries, where employee benefits may be protected, the proportion of respondents that have closed their DB schemes to accrual rises to 77 percent.
  • 12 percent of schemes have made no changes so far, compared to 15 percent in 2020.
  • 94 percent of DB schemes are closed to new entrants.

James Patten, partner at Aon, said:

“Increased closure of DB schemes was a pattern we saw emerge after the 2008 financial crisis and it seems possible that it could be repeated as we go into 2023, with organisations navigating new forms of volatility. Furthermore, following the rise in gilt yields, the size of the gap between projected DB and defined contribution (DC) benefits for members after DB closure is a lot narrower.

“This all potentially means the news of closure may be less difficult for employees to accept. Given these factors, some employers may therefore take the view that now is the right time to embark on a potentially sensitive project.”

James Patten continued:

“With the recent market volatility and improvement in funding levels, there is another driver in play. For many schemes, closure to future accrual would also be a key step in preparing to buyout benefits with insurers. Some schemes that had closed to accrual and retained a salary link on past service will also be seeking to change these ahead of a buyout.”

Focus on communication

With all this activity, the survey also demonstrates a greater focus on the communication strategy in benefit reviews. In the last five years, 87 percent of DB closures have offered member support over and above the statutory minimum consultation requirements.

James Patten said:

“There is now an increasing emphasis on one-to-one meetings with professional advisers, offering personal illustrations that show the impact of the proposals, as well as town hall meetings and dedicated mailboxes. Experience shows that direct and open communication with members - helping them to understand the changes and the impact on them as individuals - has become more important to the ultimate success of a DB closure.”


The 2020 survey highlighted the importance of concessions – where benefits are improved beyond the employer’s current approach for new hires in a DC environment - and that continued in 2022. Enhanced ancillary benefits such as life cover and redundancy terms, as well as higher DC contribution rates, remain the most popular, alongside cash lump sums.

James Patten said:

“This is a trend we’ve seen grow since 2020 from 62 percent to 68 percent. Our expectation is that it’s also a trend that is going to continue - members clearly value these benefits highly and they can make a difference to the way the overall proposals are received.”


Aon’s ‘2022 Defined Benefit Pension Design Survey’ is available here.


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Media Contacts:

Colin Mayes
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James Hartwell
Kekst CNC
+44 (0)7870 487532
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