In the last ten years, the gap between the assets and the liabilities of defined benefit (DB) pension schemes has almost doubled. The deficit now exceeds £800 billion.This is despite many DB schemes closing and £160billion of contributions being made. The deficit is the equivalent of £73,000 for each and every member of the remaining 6,000 or so DB schemes.
We have conducted research into the increasing challenges of managing defined benefit pension scheme deficits/ assets.
Our findings are the basis for our latest white paper titled, ‘How do we get out of this Pensions Black Hole?’ in which we attempt to find a lasting settlement on ballooning DB pension deficits.
With deficits having risen to the equivalent of £83,000 for every member of remaining DB schemes, we found that
- Consolidation of defined benefit (DB) pension schemes could cut costs by £500M a year
- Combining consolidation with benefit simplification will reduce costs even further
- Savings could exceed £10 billion over DB schemes’ lifetime
- ‘Doing nothing’ is simply not an option anymore.