UK public companies boosted by potential pension funding change
Shares in BT, British Airways and ITV were fairly buoyant towards the end of last week amid news that the Pensions Regulator may be taking a softer stance on pension deficits. The three companies mentioned above have particularly large pension fund deficits, due in the main to a fall in the value of property and the UK stock market, which had led to fears of financial problems in the short to medium term.
There were significant concerns that companies currently experiencing significant pension deficits would be either forced to redirect profits to their pension funds or take on further debt to cover ever increasing liabilities for the future. However, the Pensions Regulator has suggested that funding issues are open to negotiation amid the ongoing downturn in the UK. This will see a number of finance directors across the UK breathing easier this weekend although as ever we await the fine details of the proposed changes.
This is the first time the Pensions Regulator has actually come down on the side of corporate entities as opposed to protecting the pension fund arrangements of employees. However, in many ways the regulator had very little choice because by pushing companies too hard to cover their deficits too quickly this could put many companies at risk and worsen a pension problem which is already critical in many cases.
Share this..
Related stories
Is Prudential about to cut ties with the UK?
Despite the fact that the Prudential has links with the UK going back to 1848 it is believed that directors of the company are currently considering a sale of the UK business. This is a shock for many analysts who believed that the Prudential would be based in the UK forever and a day. So why the potential change in policy? The rumours about a potential sale of the UK business centre round the...
Read MoreMortgage liquidity is the key to the UK economic revival
While there is no doubt that the UK economy has shown signs of life over the last few months, there are serious concerns that a reduction in mortgage liquidity in 2010 could force a second slump in the UK property sector. An influential report by Ernst & Young highlights this particular issue and seems to be gathering more and more supporters in the city. So what exactly is happening?
Read More
White collar fraud on the increase
In a sign of the times it has been revealed that a record £1.3 billion of white-collar fraud was the subject to court action in 2009. This is the highest figure for over 20 years and brings the total involved in white-collar fraud over the last decade to over £7 billion. When you consider that "just" £5 billion of similar fraudulent activity reached the courts in the 1990s this is a perfect exa...
Read MoreUK house prices back to 2006 levels
Despite the fact that house prices in England and Wales have increased each month for the last eight months, and are in fact 8.4% higher than a year ago, they are only now back to levels seen some four years ago in August 2006. This was 12 months before the credit crisis struck home and perfectly illustrates how the UK property market, and indeed the worldwide property market, suffered during the...
Read MoreHow long will it take for the UK economy to recover?
The last few days have seen an increase in the number of sectors struggling to survive and companies making direct appeals to the UK government for state aid. We have seen the banks continue to struggle, retailers overtaken by their online rivals, the construction industry literally falling to its knees and even the once "safe" PFI sector has had to be bailed out by the UK authorities. So how long...
Read More