How do we get out of this pensions 'black hole'?

10 October 2016

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.

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