UK - Utility and transport companies are seeking approval to shunt the burden of their deficit-ridden pension schemes to the public through increased prices.
Scottish Power, Network Rail and water companies Anglian Water and Northumbrian Water have all approached their respective regulators for permission to raise their prices.
But the move to charge the public for the poor performance of the stock market will only further anger those who have already had to face a record 12.8% jump in council tax this year, argued PMI president Ian Eggledon.
He added: “People understand there is a pensions issue and that the money has got to come from somewhere to put things right, but they will not like it when it comes out of their own pockets.”
Scottish Power has seen pensions costs soar from £7m to £16m over the past year after falling markets wiped a £130m FRS17 surplus from its £2.6bn UK-based scheme.
The scheme now holds a £231m deficit.
The firm has now set “regulatory recovery” of these costs as a priority.
And a spokesman for Network Rail said the transport operator was also seeking similar regulatory approval.
He said: “Pension costs are part of our operating expenses which the regulator is responsible for funding, and it’s part of what we will be putting forward to him in our funding requirements.”
Water regulator Ofwat is to review prices within the water industry in August.
Head of external relations Julia Havard confirmed it was likely that any price increases would go towards plugging scheme deficits.
She said: “Some firms want to spend more money on pensions because of market volatility and we will take these requests into account.”
Hewitt Bacon & Woodrow partner Raj Mody explained: “Although these schemes operate under a different framework to others, the principles are the same.
“If there is a shortfall, that has to be made good either by investment returns or by putting in extra cash, which has to come from somewhere.”
The Pensions Regulator (TPR) has granted 11 master trusts extensions to apply for authorisation, as it confirms it has received 22 applications ahead of the 31 March deadline.
Aegon Master Trust, Fidelity Master Trust and Ensign have sent off their authorisation applications to The Pensions Regulator (TPR).
Self-administered pension funds spent £15bn on payments to pensioners in Q4 2018, but received just £12bn in contributions (net of refunds), Office for National Statistics (ONS) data reveals.
Aberdeen Standard Investments (ASI) and Gresham House are to team up to form a joint venture.