GERMANY - Automotive supplier Magna International denies media reports saying it has asked the German government to bear the burden of the pension fund of takeover target Opel, a General Motors subsidiary.
Magna spokesperson Daniel Witzani said the subject was completely under discussion at the moment and there was no decision taken yet.
He said: "We aim to get to an optimal solution with the federal government, with Opel and the employees' pension fund. But it is not true we asked to transfer the whole burden to the government."
Italian automaker Fiat and private equity group RHJ International are the other players which have presented offers to GM.
Today all the parties involved, including the federal and local German governments, are meeting in Germany to discuss the offers presented by the three rivals.
The federal government is said to have a deciding voice as it will provide financial support to the deal, in particular with loan guarantees.
Watson Wyatt investment consulting practice leader Torsten Köpke said the issue in these cases regards the hedging of the risk of interest rate change in liabilities.
He said: "This risk comes from the fluctuation of the interest rates under international accounting standards and for a typical pension liability it could easily amount to 15% of the underlying liability."
The Royal Society of Arts (RSA) has reignited the debate on the introduction of flat-rate pensions tax relief - saying a 30% flat rate would be progressive, cost-neutral and leave three-quarters of earners better off.
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