5th June 2018 Calling all pension liabilities

It is a welcome change that defined benefit pension liabilities of employers are now high profile when there are challenges to businesses – for too long pensions liabilities have gone without mention when there is any problem for a business, despite being a major creditor. Frank Field MP and the Work and Pensions Select Committee have pushed pensions to the forefront of business activity, as shown by recent letters demanding that pensions to be protected to, among others, Dixons Carphone. However, pension issues are complex, and in particular the level of liability is in a constant state of flux, relying as it does on various assumptions about future growth, morality, etc. The accounting assessment of the liability is the only public figure, and tells us almost northing about the actual cost, or the changes in cost, of running the scheme. In addition, it is not clear what exactly anyone might expect take the necessary steps to secure the future of the business, so that it can keep paying the reported £46m a year into the scheme – presumably the same steps it would take if it didn’t have pensions to worry about.

Partner Rosalind Connor

Read Rosalind’s comments in City AM and FTAdviser

The views in this article are intended for general information purposes only and should not be used as a substitute for professional advice. ARC Pensions Law and the author(s) are not responsible for any direct or indirect result arising from any reliance placed on content, including any loss, and exclude liability to the full extent. Always seek appropriate legal advice from a suitably qualified lawyer before taking, or avoiding taking, any action. If you have any questions on the points raised in the above, please do not hesitate to get in touch.