Pension deficits are making it difficult for recession-hit business insurance holders to remain competitive, it has been revealed.
Research carried out by the Confederation of British Industry (CBI) and financial services provider Watson Wyatt has found that a third of UK companies believe that providing for pensions has obstructed their internal reorganisations, or mergers and acquisitions.
Some 73 per cent of business insurance customers expected that their firms will pay more into final salary schemes in their next funding plan.
John Cridland, CBI deputy director-general, said the findings indicate an ongoing commitment by companies to provide pensions for their staff.
"Businesses are not stepping back from helping their workforce plan for retirement," he commented.
"However, the high and unpredictable cost of running final salary pensions is having far-reaching and damaging effects on UK competitiveness and the wider economy."
Last week, the Institute for Employment Studies revealed that business insurance holders are re-examining the overtime system in their companies as a result of the difficult economic climate.
