The Pensions Regulator warns companies about cutting pension contributions
The UK Pensions Regulator has stepped in today to warn companies in the UK that they would take a dim view of those paying dividends to shareholders while attempting in any way shape or form to reduce their company pension scheme obligations. While the regulator admits it has no legal authority to enforce pension contributions before dividend payments there are other actions which can be taken within the regulatory framework.
While so far there have been no such complaints forwarded to the regulator, many experts believe the next few months will see a number of disagreements between company directors and pension trustees with regards to pension funding arrangements. More and more people across the UK are becoming increasingly concerned about the security of their pension as the business environment continues to worsen.
While there are various regulations and rules in place to protect company pension schemes, in reality if the funding is not there, then there is little that the regulator can do. The ongoing fall in stock market and property sector, to mention just two areas of investment, has also increased the number of pension funds in deficit, with very little chance of them being rectified in the short term. While it would be foolish to suggest that the vast majority of pension funds will not be able to cover pension liabilities in the longer term, there may be some short to medium term adverse fluctuations.
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