UK - Employers who regard pension scheme deficits as a short-term issue are kidding themselves and their employees, Hazell Carr Consulting warns.
Director Michael Rudge said chief executives must not “bury their heads in the sand” or be carried along by the hope that things will get better through a sudden reversal in the fortunes of the stock market.
Rudge said pension schemes had been affected by falls in equity values and increasing longevity. But he warned that neither issue was likely to disappear in the near future.
“It seems many chief executives feel the deficit in their pension fund is merely a temporary blip and that it will disappear as quickly as it came, but this is unlikely to be the case.”
Confederation of British Industry senior policy adviser Jamie Bell agreed that chief executives must be wary not to write off deficits as a short-term issue, but said Hazell Carr was exaggerating the problem.
“There is an element of truth, but it’s not all doom and gloom.”
Last month firms were warned by ratings agency Standard & Poor’s that they faced being downgraded if they failed to address pension deficits.
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