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James Moore: Alliance puts a crafty boot into its pension-holders

James Moore
Sunday 30 October 2011 23:50 GMT
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Outlook Alliance Boots has been taking flak for allegedly putting the future returns of its 20,000 pensioners at risk by offering to change the way plans are paid.

Pensioners can choose to give up future inflation-linked increases on pensions earned before 1997 in exchange for a one-off boost today. No less than John Ralfe, the pension expert who is a former head of corporate finance at Boots, has said that the proposal looks rather better, in the long run, for the company than for its pensioners.

Now Boots has said that the figures it gave illustrating the impact of the offer were wrong. Ooops. But it doesn't change the fact that companies rarely make such offers out of the goodness of their hearts and that those who take the cash now will, with longevity rising inexorably, probably pay for it later.

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