UK corporates more wary of pensions risk than regulation
UK - Pension schemes now rank second only to market volatility as the chief risks facing UK employers, according to a survey by Aon Consulting.
The consultancy found that 41% of firms surveyed judged the risk posed by defined benefit pension schemes as either "high" or "very high", with the average score rewarded to pension risk being 3.2 out of five.
When the survey was conducted last year it showed that the risks associated with pension schemes were ranked only eighth out of a possible twelve options, including regulatory threats and damage to a company's reputation.
"The financial meltdown of late 2008 and early 2009 catalysed a massive swelling of final salary deficits which has not showed real signs of recovery," said Marcus Hurt, head of corporate solutions at Aon Consulting.
"All the time, pensions have been sucking up liquidity, the scarcest commodity of all in the recession."
The latest survey results also showed that almost half of businesses do not de-risk their pension schemes on a regular basis.
"By analysing the risks, trustees are able to understand fully the risks that sponsoring employers underwrite in relation to their pension schemes and equally employers can then understand the full range of solutions available to reduce the impact of the pension scheme on their business," said Hurt.
The survey consisted of responses from 82 companies, with many of the respondents being the institution's financial director or equivalent.