Corporate pension deficit?
25 January 2011, 11:06 PM
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Corporate pension deficit?
Is there now a legal obligation to reduce any deficit? Chap at work says yes albeit my view is that companies are free to do as they please ie pay in to it or not 
Cheers, TX.
Cheers, TX.
25 January 2011, 11:28 PM
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If it is a final salary scheme then ultimately yes. As you mention a deficit it is a fairly safe assumption to make that it is a final salary scheme.
When was the last actuarial evaluation and when is the next one?
The final stage of the valuation will include a deficit recovery plan (if funding is below a certain level) that needs to be agreed by the scheme Trustee's, all participating employers (the company/companies) and the regulator. It's legally binding unless it can be proven that the original plan is no longer suitable at which point either a new valuation is carried out or the plan is amended going through all the correct channels.
The above is a very simplistic way of putting the whole process which in actual fact takes a very long time to complete.
PS they are most certainly not able to do with it as they please, regardless of if its still an open to future accrual plan or a deferred benefits only plan. Listening to a 'chap at work' is all well and good but please dont take what they, or anyone else says for that matter, as gospel truth until you have at least spoken to the scheme administrator as this kind of question is part of the reason they are there.
When was the last actuarial evaluation and when is the next one?
The final stage of the valuation will include a deficit recovery plan (if funding is below a certain level) that needs to be agreed by the scheme Trustee's, all participating employers (the company/companies) and the regulator. It's legally binding unless it can be proven that the original plan is no longer suitable at which point either a new valuation is carried out or the plan is amended going through all the correct channels.
The above is a very simplistic way of putting the whole process which in actual fact takes a very long time to complete.
PS they are most certainly not able to do with it as they please, regardless of if its still an open to future accrual plan or a deferred benefits only plan. Listening to a 'chap at work' is all well and good but please dont take what they, or anyone else says for that matter, as gospel truth until you have at least spoken to the scheme administrator as this kind of question is part of the reason they are there.
Last edited by chris-boris; 25 January 2011 at 11:32 PM.
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