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Innovative solutions emerge as pensions deficits hit record levels
Final salary pension schemes in the private sector were underfunded by £219 billion last month, new figures have revealed.
According to the Pension Protection Fund (PPF), set up to protect pension members should their company scheme fail, the collective deficit of the 7,800 schemes increased from the £191 billion recorded a month earlier. The PPF said that just 9 per cent of final salary schemes have a surplus, with 91 per cent running a deficit.
In response, the CBI argued that employers should be allowed to fund their pensions over longer periods of time.
Katja Hall, the CBI's director of employment, said: "The increase in pensions liabilities this month reflects the current volatility in financial markets. The government and the Pensions Regulator must allow firms to take a long-term approach. If they do not do this, firms could be forced to make large contributions to their pension schemes when they can least afford them. This would not be in the interests of pension funds, companies, the economy or the government."
The CBI said it wants the Pensions Regulator to approve longer recovery plans as the best way of keeping businesses viable.
O'Connors LLP, working with leading pensions experts, has been developing a unique insurance-based solution to help employers meet recovery plan obligations without creating a trapped surplus. For further information, please contact Paul O'Connor or Nigel Wallis on 0151 906 1000.
