Relaxed Rules by Pensions Regulator

[John Ratsey]

See this report: http://www.bbc.co.uk/news/business-17862986

The employers will be allowed to assume that investment returns will improve.

While the report mentions 300 pension funds with 600,000 members it is unclear which funds are included. While Halcrow could have pleaded eligibility due to cash flow problems, this is no longer the case.

The report also mentions the damage caused to pensions funds by Quantitative Easing (QE) which depresses bond yields.

John

[Jane Tordoff]

The Daily Telegraph's Business section had an article on this to-day - see link

http://www.telegraph.co.uk/finance/personalfinance/pensions/9230062/Pensions-Regulator-orders-companies-to-use-spare-cash-to-plug-pension-gaps.html

[John Ratsey]

I read the two articles as giving almost opposite messages: One allows companies to make optimistic assumptions about future investment returns while the other states that reduction of pension fund deficits should feature on a company's financial priorities. Which way will CH2M Hill jump? Make optimistic assumptions about future investment returns or start filling the funding hole by reducing dividends to shareholders? Halcrow, I recall, was quicker to reduce payments into the pension fund than reduce the dividend payments.

John

[John Ratsey]

Another news feature on pensions funding http://www.bbc.co.uk/news/business-17992325. Fund deficits are growing, again.

John