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16th December 2018
:: Blog | October 2009 (13 blogs) | Pension Buyouts: a US perspective of a UK phenomenon

Pension Buyouts: What Can We Learn From The UK Experience? 
 
 
 
 
 
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Pension Buyouts: a US perspective of a UK phenomenon 
Apologies for this lengthy quotation taken from a truly fascinating abridged paper on the UK Pension Buyout marketplace – written from a US perspective. The paper considers the decline of defined benefit schemes in the UK:
 
“In the United Kingdom, DB stakeholders have accepted the plans’ decline as inevitable and are now promoting alternative mechanisms to shore up retirement security…In addition, UK policymakers, and indeed most DB stakeholders, have endorsed the use of pension buyouts as a way to manage the decline of this once important institution. A buyout allows firms to pay an insurance company a fee to take over the assets and liabilities of their plan, thereby freeing them from their DB obligations. As such, UK policymakers perceive buyouts to be part of the process of unwinding an unsustainable institution, and most see the rising popularity of pension buyouts as a direct response to the increasingly burdensome nature of DB pensions."
 
"Conversely, policymakers in the United States are more interested in stopping the decline of DB plans than managing the decline. They prefer to think about ways to extend this institution’s life rather than manage its death, and this attitude colors their response to pension buyouts.”
 
Now take a minute if you can and read the Conclusion on Page 4 of the paper. It’s two short paragraphs but I wish we could have this read out in the House of Commons, especially the very last sentence, and splashed over the media just to show that where there’s a will, there’s a way!  See:
Mike Jones, MyCompanyPension.co.uk Ltd, October 26th 2009
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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