Pension warning from watchdog

Wed, 18 Feb 2009

The UK Pensions Regulator has made it clear that employers that offer pension schemes to their employees must not use the economic downturn as an excuse to cut pension contributions whilst maintaining dividend payments to shareholders .

For employers with final salary pension schemes, the watchdog said, current economic conditions were of major concern. Just a fraction of pension schemes remain in surplus.

Chairman of the pension regulator, David Norgrove, reportedly commented: "There is no reason why a pension scheme deficit should push an otherwise viable employer into insolvency . The pension scheme recovery plan should not suffer, for example, in order to enable companies to continue paying dividends to shareholders."
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