Watson Wyatt to act over own UK pension deficit
UK – Pension consulting firm Watson Wyatt aims to make additional contributions to tackle a £5m (€7.2m) deficit at its own £108m pension scheme in the UK.
“Watson Wyatt & Co. has indicated to the trustees of the Watson Wyatt Pension Scheme that the current funding policy is to be continued with the desired intention to meet the residual £5m deficit over five to 10 years by additional contributions,” the firm said in a filing to the US Securities and Exchange Commission.
The comments were in response to an internal query about whether proceeds from the merger between the US and European arms of the firm would be used to meet the pension shortfall.
According to its accounts for the year ended April 30 2004, it contributed £10.4m to help cut a deficit that stood at £14.3m at the start of that year.
“As with most schemes, funding policy is agreed between the sponsor and the trustees,” said a spokesman. “What Watson Wyatt & Co. has indicated to the trustees is that while there will of course be a change of scheme sponsor (from Watson Wyatt LLP to Watson Wyatt & Co.) the new sponsor will not be seeking a change in the existing and agreed funding policy.”
The company hopes the merger between the two arms will be completed by June 30 – though it “may be later”. Washington-based Watson Wyatt & Co. said in January it would buy UK-based Watson Wyatt LLP for $451m in cash and stock.
It noted that media and client response to the merger has been “muted”. It said: “In our PR, we are keen to portray a firm at ‘business as usual’ rather than focus on the business combination.”
UK managing partner Babloo Ramamurthy has indicated that some partners at the firm are sad about losing their independence in the deal.