Pensions burden prevents firms from restructuring for recovery

DEFICIT payments on final salary pensions have damaged restructuring and recovery plans for more than a third of firms, double the number compared to 2007, says a survey released today by the CBI and Watson Wyatt.<br /><br />Three quarters of the 192 companies questioned, representing over one million employees, say they will have to pay more into their next funding plan.<br /><br />CBI deputy director-general John Cridland hit out against the Pensions Regulator saying 10-year trigger plans and &ldquo;current regulation of final salary schemes is obstructing business reorganisation, often without making those pensions any safer&rdquo;. <br /><br />John Ball, head of defined benefit pensions consulting at Watson Wyatt said: &ldquo;Three-quarters of employers think they will have to pay higher contributions immediately but that&rsquo;s not the end of the story. Trustees and the Regulator will want deficits cleared more quickly if profits return, so this increase in contributions may not be the last.&rdquo;<br /><br />A spokeswoman for the Pensions Regulator stood by chair David Norgrove&rsquo;s comments in June. He said: &ldquo;I disagree that in the biggest economic crisis I&rsquo;ve seen in my lifetime it would be responsible to move the trigger for scrutiny of recovery plans.&rdquo;