Defined benefit schemes set for rocky ride

The present perilous position for final salary pensions will only be improved if the Government stops taxing returns and if actuaries, trustees, employers and employees work together to find sensible solutions

I first wrote about a possible crisis in final salary scheme funding 10 years ago last month. The trigger for the article was that the yield on long gilts had just fallen below 9% and at that time 9% was the long-term investment assumption used by many pension scheme actuaries. This raised the strong possibility that the cost of buying out the accrued benefits with a life office would be more than the assets of the scheme. I take no pleasure in having been one of the first pensions actuaries to try to draw public attention to the looming crisis in final salary scheme funding. On this iss...