28 Jun Rosalind Connor comments in Pensions Expert as UK DB deficit up £170bn in weeks
Rosalind Connor comments in Pensions Expert on the rise of UK defined benefit pension deficits grow by £170bn in the seven week run up to the EU referendum, as market volatility causes a jump by £900bn.
A recent report found eight of the the 20 companies with the largest pension deficits pay out more in dividends than the deficit. Rosalind said the current moral hazard powers wielded by the Pensions Regulator were sufficient protection against excessive dividends being paid by companies with large deficits.
She added that schemes run by FTSE 100 companies are unlikely to qualify as pension funds with no realistic chance of meeting their liabilities.
Prioritising pension funds over shareholder dividends – the measure by which many companies judge sustainable growth – could have an adverse effect on the industry, she said.
“We don’t want the good guys – who are the guys who have provided their employees with defined benefit pensions – to suddenly be the commercial pariahs of society,” said Connor.
Read the article in Pensions Expert here.