Zombie funds need touch of voodoo (TT Mar06 p8-9)

When Ericsson acquired the majority of Marconi’s business in 2005, the treatment of the Marconi UK pension scheme was a key feature. The Pensions Regulator required an immediate cash injection into the scheme of £185m and the creation of a £450m escrow account for the scheme. The scale of the additional support caused some surprise when viewed against the estimated FRS 17 Retirement benefits deficit of £140m, but less so in comparison with the estimated buy-out deficit of £1.2bn.