UK - Companies are being forced to stand behind their pension promises like never before, says Watson Wyatt.
The consultants said said that there was an increase in schemes considering both short- and long-term funding targets, with buy out as the ultimate aim, particularly for schemes now closed to new entrants.
As a result, Watson Wyatt said there will be demand for a significant increase in exposure to bonds. Companies are being forced to reassess the risk in their chosen asset classes. In some cases the volatility risk imposed on their P&L and balance sheets might be so high that companies are unable to accept it.
Nigel Bodie, a partner in the benefits practice at Watson Wyatt, said: With the introduction of additional charges for under funded pension schemes, companies are under increased pressure to reconsider their investment and funding targets.
He added: Communicating the security of pension benefits to employees is a difficult task. Absolute security does not exist. There will always be some element of doubt and the cost of any form of guarantee at all comes at a high price. Solvent companies are needed to stand behind their pension promises.”
The Pensions Regulator (TPR) and Labour MP Stephen Kinnock and will listen to the experiences of steelworkers when transferring their pensions away from the British Steel Pension Scheme (BSPS) next week in Port Talbot.
Just Group has acquired a 75% stake in the holding company of Corinthian Pension Consulting in a bid to strengthen its professional defined benefit (DB) advisory services.
The Pensions Regulator (TPR) has exercised its production order power under the Proceeds of Crime Act 2002 for the very first time as part of a fraud investigation.
The ITN Limited Pension Scheme has named Trafalgar House as its administrator for an initial term of five years.