It has been reported within the paper that the CBI are pressing the Treasury to persuade The Pensions Regulator (TPR) to use a higher discount rate when calculating some liabilities, given the present ultra-low yields on gilts.
CBI head of labour market policy, Jim Bligh has confirmed that the employers’ body is talking to Treasury about three issues it considers key for its members, including in an effort to persuade the UK Pensions Regulator to use a higher discount rate than that prevailing on gilts today when calculating liabilities.
Mr Bligh added: “We don’t know what will happen to gilt yields but the assumption is that things will return to normal.”
The move from the CBI comes after four other countries, including the US and Sweden, with large defined benefit pensions schemes made similar moves in response to interest rates on government bonds that have fallen to record lows.
However, despite the pressure from the CBI, Treasury officials have made no move in the direction of the CBI request; with the regulator and the Pension Protection Fund arguing that there is no reason for the UK to follow the path of other countries.
For more information, please visit www.twpaccounting.co.uk
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