Pensions have been hitting the headlines in unprecedented fashion over the past few years. In many cases, the reason for the publicity has been the closure of a company’s final salary pension scheme. Why are companies making these changes? Are the new money purchase arrangements really better for the modern employee? Pensions are often the most costly but least understood benefit provided by companies to their employees. This article aims to give the treasurer an understanding of the relative merits of these different pension vehicles, and how each type of arrangement interacts with the treasury function.
