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The extent to
which finance directors are concerned about pensions has been revealed
in joint research by the National Association of Pension Funds (NAPF)
and the Institute of Chartered Accountants for England and Wales
(ICAEW).
The research showed that while financial directors believe that
pensions remain an important part of the employment package, they
are also the cause of corporate headaches.
For directors operating defined benefit (DB) schemes, the main concerns
were the prospect that the company might have to make up the shortfall
in the scheme, the unknown cost of pension liabilities and their
volatility on the company balance sheet.
The next ten years are expected to bring a further decline in DB
provision and employer engagement, according to those questioned,
who said they would consider if their DB funding position improved
included encouraging a more cautious investment strategy (68 per
cent) and buying out all or some of the liabilities (57 per cent).
Only nine per cent would improve scheme benefits.
Defined contribution (DC) financial directors said their main concern
was that the pension might not be adequate when employees retire.
NAPF chief executive, Joanne Segars, said finance directors were
clearly committed to providing a good workplace pension for the
employees of their organisation, but that the pressure was mounting
to make sure schemes were more manageable for the employer.
“There is a wide spectrum of changes being considered which
means the pensions landscape will continue to evolve at a rate of
knots,” she said.
In a bid to improve services for financial professionals, the NAPF
has launched a specialist service providing information and support.
FD PensionsConnection is aimed at providing aid to those involved
in their organisation’s workplace pension, covering issues
ranging from deficits, rising liabilities, buy-outs and conflicts
of interest to the impact of pensions on corporate activity.
Quarterly newsletters, speaker evenings, a specialist website, free
subscriptions to NAPFnews and PolicyWatch and a free place at the
2008 NAPF Annual Conference and Exhibition are all included in the
membership.
Organisations can join for free at www.napf.co.uk/fdconnection
- Pensions Age
August 2008
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