LCP: Profit-seeking pension schemes 'run risks'

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LCP: Profit-seeking pension schemes 'run risks'

Corporate companies who run pensions schemes in order to make profits are taking "a lot of risks", Lane Clark & Peacock LLP (LCP) has said.

Bob Scott, partner at the European actuaries and consultancy firm, said that any profit from pensions could be jeopardised if scheme members live longer than anticipated or investment performance does not go as planned.

Changes to legislation in the future are also a danger.

Calling profit-seeking pensions a "punt", he said future legislation could make retrospective changes to the law.

"At the end of it you might not even be able to get the money out anyway because someone will go and change the rules and say you can’t take the money out," he said.

According to LCP's annual Accounting for Pensions report published this week, UK pension schemes of the FTSE 100 companies have had a net deficit of £41 billion in mid-July, compared to a £12 billion surplus a year before.

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