Trustees fear for pensions in case of takeover

Wed, 06 Feb 2008

According to a report in the pensions news released by Aon consulting, a pension benefits and HR consultants, as many as 72 per cent of pension trustees would fear for pension schemes should a private equity firm take control of their sponsoring company .

To glean the results, Aon surveyed over 250 trustees, all of whom serve Defined Benefit schemes. According to the report, the idea of being bought out by a private equity company increased fear amongst 72 per cent of trustees.

Speaking about the report, Paul McGlone, a senior actuary and principal at Aon, reportedly commented: "The survey shows that the private equity industry still has challenges to face to win the backing of trustees, who are not just concerned by its asset stripping reputation or fears over scheme funding, but also by the attitude to scheme members. Some trustees’ fears are very specific and well founded, such as the concern that gearing could move the scheme down the order of creditors . However other concerns are simply a fear of the unknown."
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