BusinessCompany NewsFDs warned against overfunding pension schemes

FDs warned against overfunding pension schemes

FDs should check to see if they are overfunding their companies' staff pension schemes following improved perfomance in equities

Finance directors should urgently check their their companies’ pension
funding arrangements in case they are ploughing too much into schemes.

Improved performance in the markets has led to an improvement in the value of
pension schemes, and businesses might now be wasting money by overpaying into
staff schemes that previously faced big deficits, warns pensions experts Hymans
Robertson.

‘Most pension schemes have experienced significant improvements in their
finances over the last six months and if the same FDs were negotiating their
pension contributions now, the outcome would most likely be much lower
contributions,’ said Martin Potter, partner at Hymans Robertson.

‘Companies paying more than necessary on pension deficits are in serious
danger of harming their bottom line. This is real money and once paid into a
pension scheme the prospect of ever getting it back is negligible. Improved
funding positions are also a great platform for taking some investment risk off
the table and “cashing in some of their chips” as it were.’

Fears have also grown that accounting rules could force pension surpluses to
be recorded in the accounts as
liabilities
.

Further reading:

Pensions fears over over-funded schemes

Employee benefits: pensions

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor