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Old 5th November 2001 | 00:50
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OrsonCart
 
Joined: May 2000
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From: Vatican City
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This is how I understand the pension business. Every (So many years as determined by the trustees for the scheme) the company pension is valued; its assets are weighed against its liabilities. If it is found that a scheme is doing rather well, the company or the employee’s contributions may be reduced for a set period, or the benefits as a whole can be improved without altering contributions. Actuaries advise the trustees and make sure the contributions will meet its liabilities under law.

If I operated a company that had a very strong pension scheme, it would be one area that I would consider examining in order to reduce costs temporarily. The law does not allow a ‘Maxwell’ raid of schemes anymore, so contributions are pretty safe without damaging returns.

Many companies legitimately operate ‘holidays’ so nothing to fear. The independent actuaries keep a sound check on pension performance and advise accordingly. Companies cannot any longer randomly reduce contributions unless approved by the trustees on advice from the actuaries/.

Hope this helps?
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