UK - Pension funds could suffer if companies use bond issues to plug holes in their final salary scheme, a consultant warns.
Marks & Spencer has issued a £400m bond issue to cover a £1bn deficit in its final salary scheme and last year BP issued corporate debt to help fund a £790m cash injection.
But if trustees put some or all of the proceeds from a bond issue into equities, the strategy could backfire, Hewitt Bacon & Woodrow associate Martin Kraus warns.
He said: “It is not very secure to put it in the stock market. If trustees put the proceeds in bonds instead of equities then they are more closely matching the liabilities of the scheme which is less risky.”
Willis Towers Watson's LifeSight is the first master trust to be granted authorisation by The Pensions Regulator (TPR).
An innovative funding structure has been agreed for Croydon Pension Fund. However, there are some concerns about the arrangement. Stephanie Baxter reports
Some 52% of red flags raised by schemes on suspected scam pension transfers involve advisers or unregulated introducers, a report by the Pension Scams Industry Group (PSIG) has claimed.
The Norfolk Pension Fund has been successful as the lead plaintiff in a class action case that went to jury trial in California involving securities fraud.