UK - More than one fifth (22%) of companies feel increasing defined benefit pension costs are hurting share price, research by Aon Consulting has found.
But the situation has improved in recent times, as a similar survey last year revealed more than a third of companies (36%) expressed concerns over shareholder value.
Aon Consulting senior actuary Paul McGlone attributed the improvement to rising equity markets and bond yields. But he stressed the funding of DB schemes was still a “considerable problem” for many UK companies.
That fact was underscored by the finding that 30% of companies had already increased prices as a result of pension costs.
And the situation could worsen before it impro0ves with a third (33%) of those surveyed forecasting pension costs would continue to increase the upward pressure on the cost of their goods and services in the future.
The research highlighted how high pension costs had hit workers pockets as well, with nearly half of UK companies (49%) claiming it negatively impacted the remuneration packages they were able to offer.
McGlone said: “Based on the survey results, the message from the employers seems to be that the cost of pension deficits is most likely to be met by changes to employee remuneration, with customers being hit second, and shareholders suffering least from the pension debts.”
The Pensions Regulator (TPR) has set out plans to use "new regulatory initiatives" with over 1,000 schemes as it aims to tighten its regulatory grip and boost member outcomes.
HM Revenue and Customs (HMRC) has announced it is delaying the provision of data that will enable pension schemes to confirm the guaranteed minimum pension (GMP) benefits to pay to members until the end of the year.
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