FINAL WORD: Don't rush to buy in to buyouts

It is no secret that most employers would give their eye teeth to be shot of their pensions liabilities. But, like husbands and divorce, they just can't afford to. It costs a lot of money to persuade someone to take a high risk business like pensions off your hands. Given most pension schemes a...

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Bibliographic Details
Published inCorporate Adviser p. 46
Main Author Hunter, Teresa
Format Trade Publication Article
LanguageEnglish
Published London Centaur Media USA Inc. (A member of Centaur Plc Group) 01.10.2010
Subjects
Economic conditions
Employee benefits
Employers
Insurance
Insurance industry
Pensions
Wages & salaries
United Kingdom > UK
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Summary:It is no secret that most employers would give their eye teeth to be shot of their pensions liabilities. But, like husbands and divorce, they just can't afford to. It costs a lot of money to persuade someone to take a high risk business like pensions off your hands. Given most pension schemes are in deficit, without enough to meet even their basic liabilities, it is hardly surprising only a few have been so flushed with cash they could splash out on luxuries like casting adrift life's annoying millstones. But that will change over the next few years, if recovery plans pan out as the Pensions Regulator envisages. Most funds should be back in the black within the decade, at which point the economy may be booming to such an extent that it will be a case of "carpe diem". Finance directors may consider that failing to seize the day, and secure a buy out, could amount to sheer recklessness. Before too long, there may well come a point where the bulk of final salary schemes are no longer in the hands of employers, but with insurance companies.
ISSN:1756-087X