Are employers ducking their responsibilities over defined-benefits schemes?

Firms may be using the insolvency system to renege on the pension promises they’ve made to members of defined-benefit pension schemes.

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Bernard Matthews: pension scheme was less than bootiful
(Image credit: Credit: Trinity Mirror / Mirrorpix / Alamy Stock Photo)

Concerns are growing that firms may be using the insolvency system to renege on the pension promises they've made to members of defined-benefit (DB) pension schemes. Almost one in five schemes now run by the Pension Protection Fund (PPF), the lifeboat scheme for the pension plans of failed companies, ended up with it following a "pre-pack" administration procedure, with £3.8bn worth of pension liabilities passed on in this way, according to research published by the FT.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.