UK - Engineering firms have rejected moves for an industry-wide scheme - even though employer groups hail it as a saviour for the troubled sector.
The Engineering Employers’ Federation and Confederation of British Industry believe an industry-wide scheme would ease pressure on firms which are struggling in the face of increased international competition.
But the EEF says the move – which would eliminate FRS17 troubles and cut down on administration costs – has received a lukewarm response.Director of employment policy David Yeandle said: “We set up a GPP scheme but it has had a limited take-up.
“The problem is there are a lot of companies that have an established scheme and then there are others that offer no scheme at all and aren’t looking to change that.”
Yeandle said the situation was unlikely to alter unless the government opted to make employer pension contributions compulsory.
CBI pensions officer Jamie Bell thought the engineering sector was an obvious choice for an industry-wide scheme.
“Employees in engineering firms who change jobs will stay in the sector because they have key skills that are in demand. So the industry-wide scheme makes sense, especially to smaller firms that are generally happy to pass on their liabilities and contribute to an industry-wide scheme.”
Many UK engineering firms are currently struggling to keep up payments to their final salary schemes.
Society of Pensions Consultants president Donald Duval said: “There are many employers desperately trying to fund their pension schemes.
“If they are an employer in an engineering sector, life is pretty tough and they have to choose between supporting the pension scheme and keeping the company going.”
Last year it was revealed that engineering consultant Blyth & Blyth had placed its £11m scheme into wind-up because it could not afford an increase in contributions to plug a £6m deficit.
Members were told it was unlikely that they would get their full benefits.
Mark Evans has been appointed as a director at Independent Trustee Services (ITS) to lead trustee appointments in London.
The Pension Protection Fund (PPF) is consulting on changes to the actuarial assumptions it uses in valuations in a bid to better reflect the bulk annuity market, with schemes set to move into surplus on aggregate.
Private sector defined benefit (DB) schemes were 96.3% funded on a Pension Protection Fund (PPF) compensation basis at the end of July, according to the lifeboat fund's monthly index.
Conduent has completed the sale of its actuarial and human resource consulting business to private equity investor, H.I.G. Capital.