Yes, things need to change. Yes, we need to look again at structural problems caused by inappropriate accounting standards and unnecessary regulation. Yes, it is “bleeding obvious” that schemes should merge whenever practical and cut costs. However the message should be shouted out loudly and clearly at every opportunity that DB schemes are still affordable and can offer massive benefits to both employer and employees. They should, in my view, be the bedrock of everyone’s pension’s provision. While trust-based defined contribution (DC) schemes have an important role to play, the vast majority of ordinary working people are desperate to seek financial certainty in their old age. Employers need to not only offer a package that will attract and retain staff but they also have a duty to try and ensure that their staff do not end their lives in poverty.
We cannot let the huge mistakes made decades ago in the funding and actuarial assumptions of DB schemes distract us from the little said facts that future contribution projections in DB schemes have barely altered from traditional assumptions. With some necessary updating they are as affordable now as they have ever been.