Reading Robert Levy's letter and Bernard Kelly's reply (PJ, 22/29 August 2009, p220) on the subject of the cost of defined benefit (DB) pensions for Royal Pharmaceutical Society staff leads to a number of other questions. Mr Kelly stated that, apart from closing the DB scheme to new entrants in 2003, benefits accrued have been reduced and staff contributions had been raised to 9 per cent. It would be helpful to know what the changes were to the future accrual rates and why the Society has not, as a number of large companies have already done and 35 per cent are considering doing, closed the DB scheme to existing members and moved to a defined contribution (DC) scheme. Other measures to control costs can be moving from a final salary to an average salary scheme (as a large number of open DB schemes are considering). Given that pension consultants consider the cost to employers of a final salary l/60th DB scheme is 30-40 per cent of salary and most DC schemes only have 5-10 per cent employer contributions, the contribution rate of 9 per cent is clearly not covering the costs.
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