Lifeline for final salary pension firms

Published on Saturday 22 November 2008 13:16

COMPANIES struggling to cope with the costs of running their final salary pension schemes, particularly during the current economic downturn, have been thrown a lifeline by a firm of actuaries.

Edinburgh-based CPRM, which specialises in pension advice to small and medium sized firms, has launched a service allowing several company schemes, from any industry, to be managed under one roof by a single trustee. This allows schemes to keep their independence while cutting costs. CPRM said it gives SMEs economies of scale and levels of governance that would normally be beyond their reach.

Jonathan Black, managing director of CPRM, said financial directors of smaller firms are spending a disproportionate amount of time dealing with trustee issues surrounding pension schemes.

CPRM has already signed up two companies to its service, both of which were previously part of the Motor Industry Pension Plan, a multi-employer scheme. Black said they felt that as smaller employers their interests were being overlooked, but they did not have enough scale to manage their own final salary scheme.

He said: "There are many small schemes that are struggling and managing deficits. Costs of running an individual single scheme are rising all the time and allied to that are increasingly stringent funding standards."

CPRM has banking in place, appointed an independent trustee and is now marketing the service to companies. It is targeting schemes worth between 2m and 5m, with up to 200 members.