Strategic Finance
Towers Perrin in pension warning |
|
|
| Strategic Finance | |
| Written by Gary Howes | |
| Wednesday, 29 April 2009 | |
|
Pensions funds will not recover for more than twenty years says Towers Perrin.
Management consulting firms Towers Perrin has today warned that the pensions industry will not recover from its exposure to the financial crisis for more than twenty years. Based on current contribution rates it will take more than twenty years to recover pension fund deficits in the UK. Combined pension fund deficits on the balance sheets of the UK's top 100 companies are now valued at £45 billion, a slight improvement since the end of March 2009. These numbers are however based on corporate bond yields which remain high. For pension trustees who are responsible for the funding of DB pensions the current deficit is more likely to be approaching £200 billion as they take a more conservative view. This raises a serious concern for the future of pension funding in the UK. John-Paul Augeri, Principal at Towers Perrin, said: "In the UK we now face decades of paying back government debt. To compound the problem, more and more pension plans are facing a similarly long and rocky road to recovery. In order to survive, employers need to understand what they can afford, appreciate the magnitude of the risks they face, and be ready to take advantage of any opportunities to reduce their debt and risk exposure as and when they arise."
|
|
Digg it! 
del.icio.us 
Newsvine 
Reddit 
Stumble It! 
