The costs and risks associated with UK defined benefit (DB) pension schemes are well known within the industry. With unprecedented changes to occupational pensions in the UK and with further revolutionary changes in the regulatory pipeline, the need for European parent companies of UK subsidiaries with DB schemes to manage these risks has become even more important.
We publish annual European company surveys that aim to provide parent companies with a useful benchmark of the UK pension exposure against other European-owned companies.
In most cases the parent companies in our surveys are leading players in their industries and are able to absorb reasonably substantial pension costs. However, the impact upon performance and return on investments of the UK subsidiary companies can be more pronounced. Comparisons of these subsidiaries against other UK companies without legacy DB pension liabilities, especially on a cash basis, could be heavily influenced by the pension related costs and cash contributions.
Our reports analyse the contributions paid, levels of deficit and levels of risk within the schemes.