THE government must lengthen the period over which it assesses the health of company pension schemes, according to the CBI.
The employers’ organisation is today pushing for “urgent action” to extend the rule forcing the Pensions Regulator to investigate firms’ funding plans where deficit repayments will take more than ten years to 15 years.
It says such a change would alleviate pressure on firms to divert cash from fighting the recession into trying to fill a pensions deficit.
“We cannot allow sound businesses to be dragged down by these pensions, particularly during a recession,” says CBI deputy director general John Cridland.
The CBI also believes the marked-to-market approach of valuing pensions liabilities must be adapted to avoid the worst misrepresentations of the scheme’s position on a spot-value.
Its call for action comes as a number of FTSE 100 firms face triennial reviews – the snapshots used to set funding levels for pension schemes. Earlier this month, BT became the first major corporation to force the Pensions Regulator into retreat over contributions to its occupational final salary scheme. Under the agreement, it could take BT over 20 years to close the funding gap, rather than the usual ten.