More final salary pension schemes look set to be closed as companies continue to look for ways to reduce their pensions liabilities.

Mercer Human Resources Consulting said firms were likely to need either to close their final salary pension schemes altogether or redesign them to spread the risk between employers and staff in the face of rising pension costs.

The group calculates that the cost of running a typical final salary pension is set to rise by 30 per cent during the next five years.

But it said closing a scheme to new members would only reduce this increase by about five per cent, meaning firms still faced a 25 per cent rise.

Peter Bowers, European partner at Mercer, said: "Employers everywhere still need to bite the bullet and take some hard decisions on cutting their pension costs.

"The majority of companies have already closed their final salary schemes to new members but this was the easy step. The next big issue is how to deal with the current membership.

"Closing a scheme to new entrants is a relatively easy decision but employers are fooling themselves if they think this alone will solve the problem of rising pension costs and increasing risks."

Mercer predicts there will be a new wave of pension reviews, with many final salary schemes either adapted to reduce employers' risks, or closed to existing members.

It expects an increase in more innovative pension schemes, such as career average schemes, in which retirement income is guaranteed but based on a member's average salary during their working life, rather than their pay immediately before they retire.

Other schemes which could be introduced include hybrid schemes, which are a mixture of final salary and defined contribution pensions, and shared-risk final salary schemes, under which the cost of building up benefits is shared by employers and staff, with contributions from both groups varying from time to time.

Figures from the Government's Actuary's Department showed that 4.5 million staff in the public sector were members of a final salary pension in 2000, only slightly lower than the 4.6 million employees in the private sector who were members of a scheme.