28 July 2008
Mike O'Brien, the Pensions minister, has warned of the possible
effects of a proposed change in valuing pension liabilities set out
by the Accounting Standards Board's (ASB).
In his letter to the ASB, Mr O'Brien stated that te use of a
"risk free" rate would be "seriously detrimental to pension
provision if the board insists on doing what they appear to be
moving towards". The use of this rate could lead to further closure
of final salary schemes he warned.
The NAPF voiced similar concerns a
fortnight ago believing that liabilities would increase by 25% to
100% under the new method. The full NAPF statement can be found
here:
http://www.napf.co.uk/news/index.cfm
