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Pension trustees set to demand more money from companies

The Pension Regulator’s aim to remove final salary scheme deficits within 10 years means companies should expect greater cash demands from trustees.
TPR’s consultation document on final salary scheme funding says it will, in most instances, compel companies to fund their DB scheme deficits within a decade.
PricewaterhouseCoopers pensions practice lead partner Marc Hommel says this will increase pressure on trustees who will have to negotiate extra funding from employers.
Hommel says: “Trustees should no longer measure shortfalls on unrealistically optimistic actuarial assumptions nor agree to shortfalls being paid off over longer than necessary periods. Even where an employer does propose to fund a shortfall over the ten years suggested in the guidelines, the Pensions Regulator says trustees may be expected to try to have it paid off sooner where the employers financial position allows.”

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