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| Version 0 | Version 1 |
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| Pension fund worry for UK firms | Pension fund worry for UK firms |
| (about 4 hours later) | |
| By Maryam Moshiri Business reporter, BBC News | |
| Mark Walsh: "I could be working until I'm 70" | |
| More companies could go bust if they fail to plug the gap in their pension funds. | More companies could go bust if they fail to plug the gap in their pension funds. |
| That is the warning from a firm of leading pensions experts, which comes just over a week after the UK arm of magazine Reader's Digest went into administration under a large pension burden. | That is the warning from a firm of leading pensions experts, which comes just over a week after the UK arm of magazine Reader's Digest went into administration under a large pension burden. |
| Readers Digest UK, which was founded in 1938, was for decades a successful magazine with readers all over the world. | Readers Digest UK, which was founded in 1938, was for decades a successful magazine with readers all over the world. |
| But the group's pension deficit hit £125m and a deal could not be reached to pay it off. | But the group's pension deficit hit £125m and a deal could not be reached to pay it off. |
| Around 1,000 members on the firm's pension plan are still waiting to hear how they will fund their retirement. | Around 1,000 members on the firm's pension plan are still waiting to hear how they will fund their retirement. |
| Not alone | Not alone |
| The Reader's Digest story has reignited fears about the safety of pensions for millions of employees relying on schemes with big deficits. | The Reader's Digest story has reignited fears about the safety of pensions for millions of employees relying on schemes with big deficits. |
| And pensions consultants Lane, Clarke and Peacock say it is a real possibility that the same thing could happen to other firms. | And pensions consultants Lane, Clarke and Peacock say it is a real possibility that the same thing could happen to other firms. |
| No way am I going to pay into a pension again Mark Walsh | No way am I going to pay into a pension again Mark Walsh |
| "They're struggling in the aftermath of the credit crunch and the financial crisis with their ongoing business and at the same time the pension trustees are saying we need more money," warns senior partner Bob Scott. | "They're struggling in the aftermath of the credit crunch and the financial crisis with their ongoing business and at the same time the pension trustees are saying we need more money," warns senior partner Bob Scott. |
| "This is going to have an impact on company balance sheets, on their profits and their cash flow. | "This is going to have an impact on company balance sheets, on their profits and their cash flow. |
| "I'm sure there'll be some companies who as a result will go the same way as Reader's Digest, with members getting lower pensions." | "I'm sure there'll be some companies who as a result will go the same way as Reader's Digest, with members getting lower pensions." |
| Unclear future | Unclear future |
| Mark Walsh, from Cardiff, told the BBC about how he lost his job and his pension last year when the company he worked for went bust, which he believes was partly due to its huge pension deficit. | Mark Walsh, from Cardiff, told the BBC about how he lost his job and his pension last year when the company he worked for went bust, which he believes was partly due to its huge pension deficit. |
| He had been paying into his final salary pension for 15 years but is now unsure about how he'll fund his retirement. | He had been paying into his final salary pension for 15 years but is now unsure about how he'll fund his retirement. |
| Reader's Digest reignited fears about the safety of pensions | Reader's Digest reignited fears about the safety of pensions |
| "You plan for your future, you plan for your retirement and luckily I've got a few more years to try and save for that but I'm going to lose a lot of money in the 15 years I paid into it," says Mr Walsh. | "You plan for your future, you plan for your retirement and luckily I've got a few more years to try and save for that but I'm going to lose a lot of money in the 15 years I paid into it," says Mr Walsh. |
| "I know the pension we had was a very good pension." | "I know the pension we had was a very good pension." |
| There are a number of big-name firms who have been in the news because their pension fund deficits are too high. | There are a number of big-name firms who have been in the news because their pension fund deficits are too high. |
| British Airways, Nortel, BT and BAE Systems are all known to have large pension shortfalls and though none of these firms are about to fail, experts believe the coming years will be difficult. | British Airways, Nortel, BT and BAE Systems are all known to have large pension shortfalls and though none of these firms are about to fail, experts believe the coming years will be difficult. |
| "Companies are having problems with their final salary pension schemes because profits have got squeezed as the economy's turned down and we've moved into recession," says Tom McPhail from Hargreaves Landsdown. | "Companies are having problems with their final salary pension schemes because profits have got squeezed as the economy's turned down and we've moved into recession," says Tom McPhail from Hargreaves Landsdown. |
| "They're also finding that because of accounting standards, improved life expectancy, falling investment returns, all of these factors have created holes in the pension schemes and these companies don't have the money to fill those holes." | "They're also finding that because of accounting standards, improved life expectancy, falling investment returns, all of these factors have created holes in the pension schemes and these companies don't have the money to fill those holes." |
| 'Once bitten' | 'Once bitten' |
| Mr Walsh has now found another job but is unsure about investing in a pension again. | Mr Walsh has now found another job but is unsure about investing in a pension again. |
| "No way am I going to pay into a pension again. I've been bitten once and I wouldn't want that to happen again," he says. | "No way am I going to pay into a pension again. I've been bitten once and I wouldn't want that to happen again," he says. |
| "In these difficult times I'm going to have to look at alternatives for my future. | "In these difficult times I'm going to have to look at alternatives for my future. |
| "I don't know what I'm going to get out of this pension when I retire, I know I'm probably going to have to work longer." | "I don't know what I'm going to get out of this pension when I retire, I know I'm probably going to have to work longer." |
| With around 90% of final salary pension schemes now in deficit, the worry is that the era of generous retirement plans for employees is over. | With around 90% of final salary pension schemes now in deficit, the worry is that the era of generous retirement plans for employees is over. |