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Statistical bulletin: Occupational Pension Schemes Survey 2010 This product is designated as National Statistics

Released: 27 October 2011 Download PDF

Key points

  • Total membership of occupational pension schemes in 2010 was estimated to be 27.2 million, compared with 27.7 million in 2009.
  • Active membership continues to fall. In 2010 there were 8.3 million active (employee) members of occupational pension schemes, the lowest level since the 1950s.
  • Of the active members total, 5.3 million were in public sector schemes and 3.0 million were in private sector schemes.
  • For private sector defined benefit schemes, the average contribution rate in 2010 was 5.1 per cent for members (employees) and 15.8 per cent for employers.
  • For private sector defined contribution schemes, the average contribution rate in 2010 was 2.7 per cent for members and 6.2 per cent for employers.

Overview

Results from the Occupational Pension Schemes Survey (OPSS) provide a detailed view of the nature of occupational pension provision in the UK. This release provides summary data on membership of schemes and contributions paid. More detailed information on scheme membership, the nature of the benefits provided and contributions paid appears in the Occupational Pension Schemes Annual Report.

Total membership of occupational pension schemes

Total membership of occupational pension schemes in 2010 was estimated at 27.2 million, compared with 27.7 million in 2009. There were an estimated 14.7 million members of private sector schemes and 12.5 million members of public sector schemes.

Membership is evenly distributed over all three membership types: active (current employees who would normally contribute) 31 per cent; pensions in payment 33 per cent; and preserved pension entitlements 36 per cent. Individuals may have more than one of these types of membership. All estimates of membership are not counts of individuals.

Total estimated membership comprised:

  • 8.3 million active (employee) members, compared with 8.7 million in 2009

  • 9.0 million pensions in payment, the same as in 2009

  • 9.8 million preserved pension entitlements of former employees who were not yet receiving a pension, compared with 10.1 million in 2009

Number of members of occupational pension schemes: by membership type and sector

Millions
  2008 2009 2010
Active members 9.0 8.7 8.3
  Private sector 3.6 3.3 3.0
  Public sector 5.4 5.4 5.3
       
Pensions in payment 8.8 9.0 9.0
  Private sector 5.0 5.1 5.0
  Public sector 3.9 3.9 4.0
       
Preserved pension entitlements 9.9 10.1 9.8
  Private sector 6.7 6.6 6.6
  Public sector 3.2 3.5 3.2
       
Total 27.7 27.7 27.2
  Private sector 15.3 15.0 14.7
  Public sector 12.4 12.7 12.5

Table notes:

  1. Components in tables may not sum to totals due to rounding.

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Number of members of occupational pension schemes

Number of members of occupational pension schemes
Source: Occupational Pension Scheme Survey (OPSS) - Office for National Statistics

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Active membership of occupational pension schemes

In 2010, there were an estimated 8.3 million active members of occupational pension schemes, of whom 3.0 million were in the private sector, compared with 6.5 million in private sector schemes in 1991. On the other hand, active membership of public sector schemes rose from 4.2 million in 1991 to 5.4 million in 2009 before falling to 5.3 million in 2010. In the private sector there is a mixture of defined benefit and defined contribution schemes, but in the public sector all occupational pension schemes are defined benefit.

Number of active members of occupational pension schemes: by sector

Millions
   1953  1956  1967  1979 1991 2000 2009 2010
Total  6.2  8.0  12.2  11.6 10.7 10.1 8.7 8.3
Private sector  3.1  4.3  8.1  6.1 6.5 5.7 3.3 3.0
Public sector  3.1  3.7  4.1  5.5 4.2 4.4 5.4 5.3

Table notes:

  1. Components in tables may not sum to totals due to rounding.

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Number of active members of occupational pension schemes: by sector

Number of active members of occupational pension schemes: by sector
Source: Occupational Pension Scheme Survey (OPSS) - Office for National Statistics

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Number of active members of private sector occupational pension schemes: by benefit structure

Millions
  2008 2009 2010
Total 3.6 3.3 3.0
Defined benefit 2.6 2.4 2.1
Defined contribution  1.0  1.0  1.0

Table notes:

  1. Components in tables may not sum to totals due to rounding.

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The decline in active membership in the private sector since 1991 reflects the fall in active membership of private sector defined benefit schemes. Active membership of such schemes fell from an estimated 2.4 million in 2009 to 2.1 million in 2010, when 46 per cent of members were in schemes that were open to new members ('open schemes').

By contrast, active membership of private sector defined contribution schemes was unchanged at 1.0 million in 2010, with 93 per cent of members in open schemes.

Number of active members of private sector occupational pension schemes: by status and benefit structure: 2010

Millions
  Open Closed Total
Total 1.9 1.2 3.0
Defined benefit 1.0 1.1 2.1
Defined contribution 0.9 0.1 1.0

Table notes:

  1. Components in tables may not sum to totals due to rounding.

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Most members of defined benefit schemes in the private sector belong to 'final salary' schemes, but in 2010 there were 0.3 million active members in 'career average' schemes, a form of defined benefit scheme which use average earnings over the whole career rather than final earnings to calculate the pension. Of these, 0.2 million active members were in schemes which revalue pension entitlements in line with prices (see Background notes).

Contribution rates in private sector occupational pension schemes

Private sector defined benefit schemes had higher contribution rates than defined contribution schemes in 2010, as in previous years:

  • for defined benefit schemes, the average contribution rate was 5.1 per cent for members (employees) and 15.8 per cent for employers

  • for defined contribution schemes, the average contribution rate was 2.7 per cent for members and 6.2 per cent for employers

In private sector 'career average' schemes revaluing in line with prices, average employer contribution rates were lower (at 11.8 per cent) than for defined benefit schemes as a whole. Average member contribution rates in such career average schemes were slightly higher (5.4 per cent).

Weighted-average contribution rates to private sector occupational pension schemes: by benefit structure and contributor: 2010

Percentages
    Member contributions Employer contributions Total contributions
Defined benefit schemes 5.1 15.8 20.8
   Career average schemes 5.4 11.8 17.2
Defined contribution schemes 2.7 6.2 8.9

Table notes:

  1. Includes schemes where standard contributions were zero.

  2. Excludes normal contributions paid as fixed amounts.
  3. Includes rates for open, closed and frozen schemes.
  4. Excludes schemes with fewer than 12 members.
  5. Components in tables may not sum to totals due to rounding.

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Weighted average contribution rates to private sector occupational pension schemes: by benefit structure and contributor: 2010

Weighted average contribution rates to private sector occupational pension schemes: by benefit structure and contributor: 2010
Source: Occupational Pension Scheme Survey (OPSS) - Office for National Statistics

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Background notes

  1. General information

    ONS conducts the Occupational Pension Schemes Survey from a sample of occupational pension schemes registered in the UK in both the public and private sectors. The survey presents a range of statistics, including membership of occupational pension schemes, contributions made by employees and employers and benefits provided by schemes. Estimates of membership include breakdowns by type of member and type of scheme.

    The survey does not cover personal pensions, where individuals enter into a contract with a pension provider (usually an insurance company). This exclusion extends to group personal pensions (GPPs) and stakeholder pensions.

    The schemes in the survey are selected at random within membership size bands from the pension schemes register - a list of all occupational pension schemes in the UK with two or more members that is maintained by the Pensions Regulator.

    The estimates for occupational pension schemes as a whole are produced on the basis of sample numbers. This is done by 'rating-up' the data from responses, by reference to a sampling fraction and response rate, with different size bands rated up individually.

  2. Annual report

    More detailed information on the 2010 Occupational Pension Schemes Survey (OPSS) appears in the Occupational Pension Schemes Annual Report 2010. This was also published on 27 October 2011. A podcast is also available.

    The results published in the annual report include comparisons with results in earlier surveys carried out by ONS and, before 2006, by the Government Actuary's Department (GAD).

  3. Definitions

    Occupational pension scheme : An arrangement (other than accident or permanent health insurance) organised by an employer (or on behalf of a group of employers) to provide benefits for employees on their retirement and for their dependants on their death. In the private sector, occupational schemes are trust-based. Occupational pension schemes are a form of workplace pension.

    Public sector schemes: Schemes covering the part of the economy that is state-provided, including central and local government, schooling, health and social services, policing and the armed forces.

    Private sector schemes: Schemes covering the part of the economy consisting of individuals, firms and other institutions. The private sector includes state-owned enterprises and other public corporations with outputs paid for by individuals directly rather than through taxation.

    Defined benefit scheme: A pension in which the rules of the scheme specify the rate of benefits to be paid. The most common defined benefit scheme is a final salary scheme in which the benefits are based on the number of years of pensionable service, the accrual rate, and the final salary. An increasingly common alternative to the final salary scheme is the 'career average' scheme.

    Defined contribution scheme: A pension in which the benefits are determined by the contributions paid, the investment return on those contributions (less charges), and the type of annuity purchased upon retirement. It is also known as a money purchase pension.

    Career average scheme: Career Average Revalued Earnings (CARE) or 'career average' schemes are a form of defined benefit scheme which use average earnings over the whole career rather than final earnings to calculate the pension. Pension entitlements earned each year are revalued (increased) during the member’s working life in line with prices or earnings.

    Scheme status: An occupational pension scheme may be open, closed, frozen or winding up. An open scheme admits new members. A closed scheme does not admit new members but may continue to receive contributions from or on behalf of existing members who continue to accrue pension rights. In a frozen or 'paid up' scheme, benefits continue to be payable to existing members but no new members are admitted, and no further benefits accrue to existing members. Members can make no more contributions but further employer contributions may be made, and may have to be made, for example to correct a deficit. A scheme that is winding up is in the process of termination, either by buying annuities for the beneficiaries or by transferring assets and liabilities to another scheme or to the Pension Protection Fund.

    Member: A member is a person who has been admitted to membership of a pension scheme and is entitled to benefits under the scheme, whether now or in the future. Active members are current employees who would normally contribute to the pension scheme (or have contributions made on their behalf). Pensioner members are members who are receiving pension payments from the scheme, their dependents and pension credit members. Most members with preserved pension entitlements ('deferred members') are former employees who have accrued rights or assets in the scheme that will come into payment at normal pension age but who are no longer actively contributing (or having contributions paid on their behalf) into the scheme. Individuals may have more than one of the above types of membership. For instance, they may be a member of their current employer's pension scheme as well as having preserved entitlements in a previous employer’s scheme. Hence, all estimates of membership include an element of double counting and are not counts of individuals.

    Further definitions are available in a Glossary (198.9 Kb Pdf) on the ONS website.

  4. Methodology and quality information

    A Quality and Methodology Information (354.5 Kb Pdf)  (QMI) report is available. The aims of the QMI report are to provide users with a greater understanding of our statistics, their quality and the methods that are used to create them. Chapter 10 of the OPSS 2010 Annual Report published on 27 October 2011 also contains full details on the methodology of the OPSS.

    Scheme numbers were not published in the annual reports for 2008 and 2009 due to concern with the estimation process. Figures for scheme numbers had always been weaker than other OPSS estimates as the survey is designed primarily to measure membership numbers. As a consequence, it was decided that scheme numbers would not be published until further investigation had taken place. ONS undertook a methodology review, and in May 2011 a paper was published which introduced a new methodology for estimates of scheme numbers. The scheme numbers have been reintroduced into the 2010 OPSS annual report, using the new methodology.

    The review has improved the methodology for weighting estimates of scheme numbers, but the problem of sampling variability which produced a set of unusual results in 2008 has not been solved by the new methodology. It is important to note that the estimates of numbers of very small schemes continue to be subject to considerable uncertainty. The survey does not estimate numbers of public sector occupational pension schemes.

    To maintain consistency of coverage with earlier surveys, figures for the Building and Civil Engineering Retirement Pension Benefit Scheme (closed to further accruals from April 2001) have been excluded from the 2010 survey results.

  5. Response rates

    Survey response rates

    Percentages
      2009 2010
    Private sector 85 86
    Public sector 94 92
    Total 86 87

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  6. Release policy

    Details of the policy governing the release of new data are available from the Media Relations Office. Also available is a list of those given pre-publication access (136.2 Kb Pdf) to the contents of this release.

    National Statistics are produced to high professional standards set out in the Code of Practice for Official Statistics. They undergo regular quality assurance reviews to ensure that they meet customer needs. They are produced free from any political interference.

    © Crown copyright 2011.

    You may use or re-use this information (not including logos) free of charge in any format or medium, under the terms of the Open Government Licence, or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk

  7. Details of the policy governing the release of new data are available by visiting www.statisticsauthority.gov.uk/assessment/code-of-practice/index.html or from the Media Relations Office email: media.relations@ons.gsi.gov.uk

    These National Statistics are produced to high professional standards and released according to the arrangements approved by the UK Statistics Authority.

Statistical contacts

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