Using U.K. Pension Plan Deficits to Advantage

Abstract

Any employer sitting on a defined benefit pension plan deficit in the United Kingdom has an opportunity to reduce plan costs, sometimes substantially. This is available to all employers—rich or poor, big or small. Employers who seek to reduce deficits through conventional means—by paying what the plan actuary or the trustees want, by lump sum additions, or if they are finding it a struggle to do so—are wasting great opportunities. To seek plan changes when the plan is in surplus usually costs money. To seek plan changes when the plan is in deficit is a one-off opportunity to achieve exactly the same thing and save money.