This article will look at how pensions impact dividend payments and what can be done to avoid a pensions meltdown.

The key concern for companies is traditional defined benefit pension schemes, which pay pensions based on salary at retirement. While most of these have closed, indeed no FTSE 100 companies offer such schemes to new employees, the liabilities built up in the past continue to weigh on employers.

Under IAS 19 Employee Benefits, the pension deficit – the shortfall of assets relative to liabilities – is measured in a prescribed way and throughout 2016 and into this year those deficits have increased substantially across UK plc.