UK - Manufacturing firms are failing to tackle their pension scheme deficits despite their increasing influence on mergers and acquisitions, new research shows.
Business adviser RSM Robson Rhodes says schemes are becoming “deal breakers” but only half of manufacturing companies are reviewing their funding position.
The firm asked 101 senior managers and executives at leading manufacturing companies to list the factors taken into consideration when reviewing schemes.
Inherited arrangements – passing on a deficit as part of an M&A – was rated “unimportant” with only 48% of respondents carrying out a review in light of changes in the Pensions Bill. The majority of respondents considered staff welfare and recruitment as the main drivers behind any changes to their scheme.
But RSM Robson Rhodes head of pensions John White warned that failure to tackle deficits would ultimately affect share prices with investors increasingly suspicious of pension-based liabilities.
Concerns over scheme shortfalls featured prominently in takeover bids for retail giants Marks & Spencer and WHSmith.
White said: “Firms need to take pensions reform more seriously than ever. Investors are becoming increasingly wary of pension liabilities when assessing takeover targets.”
The Pensions Regulator (TPR) has appointed Charles Counsell as its new chief executive, who will take over from Lesley Titcomb when she officially resigns at the end of February.
The Reuters Pension Fund has completed a £625m full pensioner buy-in with Canada Life in the insurer's largest ever deal.
Anthony Arter will continue as head of The Pensions Ombudsman (TPO) until 31 July 2021, the Department for Work and Pensions (DWP) has announced.
The Nottinghamshire County Council Pension Fund has hired Kames Capital to run a £22m property mandate.