U.K.: More Firms Seek To Sell Off Pension Schemes As Costs Rise

New breed of buyout fund will manage schemes · Unions fear move will cut retirement payouts LONDON, England (The Guardian), October 19, 2007: More than a quarter of Britain's largest companies want to offload their final salary retirement schemes to the new breed of pension buyout funds to escape the increasing costs and regulation of guaranteed pension plans, according to a report yesterday. Around 11% of employers are considering a sale of their final salary scheme in the next five years and 16% over a longer period, the report by accountants Price Waterhouse Coopers said. The trend is also fuelled by a rise in the stock market over the last four years, increases in interest rates and booming corporate profits, which have cut the costs of selling the expensive plans to third parties. The report is expected to fuel fears that a growing number of employers will view the current climate as the ideal opportunity to separate themselves from their pension liabilities. Most firms have closed their expensive guaranteed pension plans to new entrants. Only a handful have so far closed them to existing members. Even fewer have offloaded them to one of the new buyout funds set up to run final salary schemes at a profit. Full report: http://money.guardian.co.uk/news_/story/0,,2194750,00.html By Phillip Inman© Guardian News and Media Limited 2007