UK - Companies must not jeopardise their future financial well-being for the sake of their pension schemes, a fund manager claims.
Cushman & Wakefield’s head of central London investment, Tim Sketchley, told the NAPF’s City and Eastern Group that investment in the essentials such as research and development must not be compromised to fund the legacy of pension schemes.
He said: “Of course, existing obligations must be met, but companies have to be responsible to their employees and shareholder and therefore free to change their arrangements.”
Society of Pensions Consultants president Donald Duval agreed, stressing that pension schemes were not set up to threaten the parent company’s solvency.
He said: “The original deal was that companies said to employees, this is the benefits we hope to give you, but we are not betting the company on it. But the employees had the security of the money in the fund in case the company got into trouble.
“It seems abrupt that in the effort to make up a pension deficit – crystallised through drops in the stock market – we are sending good companies into bankruptcy and people out of work.”
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