Welfare reform on the Web (October 2006): Pensions - UK

Pensions design: proposals for the 21st century

J. Wilson and S. Lee

Pensions, vol.11, 2006, p.225-234

Recent surveys of UK occupational pensions show that most final salary schemes are underfunded and are being closed to new entrants. They being replaced by defined contribution (money purchase) schemes. However some employers remain committed to their final salary scheme, but want to reduce costs. This article presents strategies for managing existing pension liabilities and options for future pension provision. It promotes the cash balance pension scheme design as a viable alternative to final salary and defined contribution schemes.

Why some piggy banks overflow …

Anon.

Labour Research, vol.96, Sept.2006, p.19-21

Presents results of a survey of the generous pension packages of directors of top UK private companies. A large number of directors will be able to retire at 60 with pensions based on their final salary. The article contrasts this with the impoverished old age faced by workers dependent on the basic state pension. It calls for an early restoration of the link between pensions and earnings.