Regulation guilty of killing off final salary schemes

db pensions

As employers struggle to meet their defined benefit obligationsyounger employees in defined contribution schemes are losing out so a solution might be career average schemes

If video killed the radio star, over-regulation may well be implicated in the death of the UK Final Salary scheme, along with its accomplices including falling stock markets, low interest rates, loss of dividend tax credits and the other usual suspects. The main reaction of employers facing the increased costs and risks of running schemes has been to abandon these schemes - as far as they can - and set up defined contribution schemes. In other words, they shy away completely from financial risk and pass it to the members rather than seek to manage it. As pension deficits have grown and th...