Defined benefit pension requirements ‘putting pressure on employers’

THE strict solvency requirements for defined benefit pension schemes are putting severe pressure on employers to close existing retirement plans for their workers.

Under the Pensions Act, funds must be capable of meeting their commitments at all times.

Mercer Human Resources Consulting warned yesterday that such a requirement was too onerous a burden on firms. The solvency test has become increasingly difficult to meet since the 2000/2001 stock market crash that left many pension plans seriously under-funded.