LCP comment on Readers Digest pensions deficit (18/02/2010)

Bob Scott, Partner said: "The Readers Digest Association (RDA) is the latest high-profile organisation to run into difficulties due to the size of its pensions deficit. RDA, which employs just 117 staff in the UK, was reported as having a pension deficit of £125m and the Pensions Regulator has now decided that the sums simply don't add up. Although RDA's circumstances are particular to them, the case does highlight the importance of having a robust plan for meeting pensions deficits and for keeping the Pensions Regulator on side.

"We await with interest developments in relation to other high-profile cases that the Regulator may be considering in the coming months. These could include BT, who have recently announced that they have reached agreement with their trustees over funding a deficit of £9bn; and BA, who are reported to be looking to reduce pension benefits and save costs in an attempt to avoid a battle with the Regulator".