Final salary pension 'crippling' struggling businesses

The CBI has warned that firms struggling to survive the recession risk being dragged down further by their final salary pension schemes.

Many businesses face closure unless they are given more time to pay off the shortfalls, the lobby group claimed.

It called on the Pensions Regulator to assist businesses which are struggling to repay deficits over 15 years - rather than ten years as currently required.

This would allow companies to manage a shortfall over a longer period of time, meaning they could prioritise job security and investment during the recession.

Moving to longer-term pension valuations would also enable businesses to continue providing final salary schemes, rather than closing them altogether.

The CBI also recommended simpler pension schemes in its eight-point plan for businesses to survive during the recession which would allow default retirement ages to be changed more easily.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.