Expectations that the Spanish government deadline for the externalisation of companies' past service liabilities would be extended to 2001, a possibility raised during debates about the recent budget, have now receded.

For the moment, it appears that the current May 1999 deadline still stands with companies theoretically re-quired to set up either defined contribution arrangements or insurance arrangements for past service liabilities. Large numbers of companies have not done so yet because of a failure to publish regulations pertaining to the insured arrangements.

There was a discussion during the budget about delaying the deadline to January 2001 but now the situation is not clear. It seems to be the same as was established under the 1995 law," says Miguel Angel Vicente, benefits and insurance practice leader with Watson Wyatt in Madrid."