DB or not DB? That is the question...

With the Pension Protection Fund currently recording major deficits and companies looking to their pension schemes as a way to cut costs, the horizon for defined benefit schemes looks bleak indeed. What is the best course of action for for navigating these hard times?

The future of the UK's remaining defined benefit schemes looks bleaker than ever. Earlier this month the Pension Protection Fund announced record deficits of £242bn, up from £205bn at the end of February. This latest increase was thanks, in no small part, to the Government's quantitative easing plan, which has caused a sharp fall in gilt yields. The shock decision of one of the most influential pensions advisers in the UK, Aon Consulting, was to slash the contributions to its own DC pension plan. Having already closed its final salary scheme to existing members in 2007, these latest cuts ...