Balancing the books
Resolving mismatches in pension assets and liabilities is now a major focus for UK companies. However, WH Smith took the plunge last year and was one of the early adopters of a liability-driven investment strategy to reduce its yawning pension deficit. Hann Ho reports
Pension deficits are quickly becoming the number one item on many UK company agendas. The introduction of accounting standard FRS17 last year elevated pension liabilities from little-noticed items in the footnotes to headline-grabbing figures on the balance sheet, while a sharp drop in UK bond yields in January briefly added an estimated £30 million to the pension deficits of FTSE-100 companies.
Pension black holes have obstructed mergers and acquisitions involving UK firms, while the country's
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