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Welfare Reform on the Web (July 2007): Pensions - UK

Testing, testing…


The Economist (print and online editions), 21 June 2007

The Pensions Regulator, the body set up by government in 2005, has issued its first-ever order to a company to make up a shortfall in its British pension schemes. The financial-support direction will be made against Sea Containers, a Bermuda-based company which owns and leases containers and runs ferry services. It filed for protection from its creditors under America's Chapter 11 bankruptcy provisions last October. The direction aims to make Sea Containers bolster the two pension schemes of its British subsidiary. Around £91m will be needed to safeguard the pensions of the plans' 1,300 members. This case is seen as the first real test of the Regulator’s powers, which makes the outcome important for the British pensions system.

Testing the covenant

N. Dunbar

Life & Pensions, June 2007, p.17-23

Report of a roundtable discussion by leading pensions trustees about the approach to liability valuation and funding, which is critical for defined benefit (DB) pension funds. Participants include Tony Watson, chairman of the Marks and Spencer pension fund, Chris Holden, chairman of the GEC Marconi scheme, and Eric Hunt, head of pensions for BAA. Issues discussed include the sponsor covenant, risk-taking, and the impact of people living longer on the pension funds and their management.

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