PPRuNe Forums - View Single Post - CHC Scotia Pension Scheme News letter.
View Single Post
Old 11th Jul 2008, 07:03
  #2 (permalink)  
Whirlygig

Hovering AND talking
 
Join Date: Feb 2003
Location: Propping up bars in the Lands of D H Lawrence and Bishop Bonner
Age: 59
Posts: 5,705
Likes: 0
Received 0 Likes on 0 Posts
So is one to believe that once again our pension pot of gold has been dipped into to provide financing for an ailing company.
Under UK company law, that is now illegal. However, pension schemes regularly have deficits and surpluses. This mainly occurs with defined benefit schemes (i.e. your pension will be 2/3 your final salary). For these schemes, actuaries (who are people that find accountancy too exciting) estimate final salaries for staff (i.e. could be 40 years time), retirements ages, lifespan of retirees. All these could alter over the years, meaning that the fund is over/under.

When a surplus occurs, some pension schemes will have a "holiday" i.e. the employer and the current employees don't have to pay into it (or a reduced percentage). If there's a deficit though (meaning the actuaries weren't very good!), then the employer only has to make it up.

During a takeover, the buying company will want their own auditors and actuaries to look at the books and this is probably how it arose; that the new actuaries thought the fund in deficit.

Upshot? Nowt to worry about!

Cheers

Whirls
Whirlygig is offline