If you provide final-salary (also called defined benefit) pension schemes for your current or previous employees, you may find the mandatory actuarial review process declares your pension fund is in deficit, meaning that the expected future liabilities will exceed the value of the fund. This will require you to negotiate with the trustees of the pension fund and the pension fund regulators to resolve the situation.
One outcome may be that you must provide a guarantee or bond for an agreed period, pending additional funding being made, in order to eliminate the actuarial deficit.
Another scenario concerning pensions is to allow employees who were previously under local government employment to remain inside the local government final-salary pension scheme when the department or unit concerned is transferred to the private sector (for example, domestic refuse collection or highways maintenance). For this to happen, if you are the new employer, you will be required to post a local government pension bond.
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