After issuing a profit warning last year, the task of managing a debt of £1.5 billion which included a pension deficit of £600 million became even harder eventually leading to the firms collapse.
Carillion’s situation isn’t unique. The collapse of retailer BHS, although not solely caused by the £571 million pension black hole on its balance sheet, shone the spotlight on other large firms with final salary pension schemes. Faced with a £2.8 billion deficit, British Airways announced it will close its final salary scheme.
Many companies are struggling to balance their pension liabilities
Other companies known to have large deficits include Royal Dutch Shell, BP, BT and BAE Systems; with all four believed to have a deficit in excess of £6 billion in 2016.
With offices in the UK, Middle East and Canada, and according to some experts over 30,000 businesses owed money by the firm, the consequences of Carillion’s collapse have the potential to be far reaching.
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One in six private sector final salary schemes are at risk of failing*
UK expats around the world are taking advantage of a combination of events that are seeing transfer values up to 40% higher than one year ago (as reported in Citywire) massively boosting their retirement funds.
Transferring away from your final salary scheme hands control back to you allowing you to choose which currencies and locations to invest in and when to start drawing an income from your pension.
Such an important decision should never be taken without receiving sound advice that considers all options and eventualities.
* Report carried out by Pensions Institute
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