Firms fear pension costs January 2012
Posted date: 21 December 2011
Proposed European (EU) pension regulations could increase costs for organisations at a time when deficits are already impacting on expansion.
Findings from an CBI and Towers Watson survey have highlighted major concern from leaders over the uncertainty of managing defined benefit (DB) schemes. Nearly 70 per cent said they were worried about the proposed EU legislation.
Under Solvency-II style rules it has been suggested that the EU enforces high deficit payments over a shorter period of time in order to add further protection for pension holders. This has the potential to cost employers billions of pounds and would distract from company growth.
Katja Hall, CBI Chief Policy Director, commented: “What is completely unacceptable is Brussels’ plan to impose further costs on firms operating DB pensions at a time like this, when the protection in place has already proven itself during the economic crisis.”
The survey also found that the running costs of DB schemes, whether open or closed, caused anxiety for nearly three-quarters of respondents. A further 85 per cent stated that they were worried about variable market fluctuations.
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- January 2012
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