Secure pensions more common in public sector » Local Government » 24dash.com

Nearly twice as many public sector workers are in line to receive a defined benefit pension as those employed in the private sector, official figures showed today.

The number of private sector employees who are members of a defined benefit scheme, including final salary pensions, fell from 3 million in 2006 to 2.7 million last year, according to the Office for National Statistics.

Among these people, only 57% belonged to a scheme that is still accepting new members.

By contrast, the number of public sector workers who have access to one of the gold-plated pension schemes rose slightly to reach 5.2 million in 2007.

Private sector employees who can no longer join a final salary scheme are instead being offered membership of a defined contribution one, with 900,000 people belonging to one of these schemes last year.

Defined benefit schemes offer far more certainty to workers, as employers state how much the final pension will be worth, based on the number of years a member has belonged to the scheme and how much they were paid before they retired.

But under less generous defined contribution ones, employers only guarantee how much they will pay into the scheme, leaving individuals to shoulder the risk of investment volatility and increased life expectancy.

Unsurprisingly, given the typically higher level of benefits paid out by defined benefit schemes, contributions to the pensions are much higher.

Private sector workers who belong to a defined benefit scheme typically contribute 4.9% of their pay, with their employer paying in 15.6% on average.

But those who belong to defined contribution schemes pay in just 2.7% of their salary, with their company adding 6.5% - less than half the level contributed to final salary schemes.

Overall, the Occupational Pension Schemes Annual Report showed that 26.7 million people belonged to an occupational pension scheme in 2007, the same as during the previous year.

But only 8.8 million were active members who were currently contributing, with 8.5 million people already drawing their pension and 9.4 million having benefits built up in schemes that they were no longer paying into.

Liberal Democrat work and pensions spokeswoman Jenny Willott said: "Millions of people will be left on the breadline unless they start making real savings for their retirement.

"The Government and businesses must do more to restore trust in pensions and warn people of the risks of not saving for their old age.

"Ministers have failed to explain how they will get more people to save for retirement. Mass means-testing remains a huge disincentive and personal accounts alone will not be enough."