Pensions  

Defined benefit ‘far from dead in the water’

The technical consultant at the Pensions Management Institute said the timeframe for working through the “remnants” of the DB industry could be half a century, twice as long as previously predicted.

He said: “The very nature of DB liabilities is long-term and we have some concerns that the industry does not fully appreciate how long it will take to reconcile through wind-ups and buy-outs.

“It is becoming increasingly clear that the buy-out market will struggle to provide the capacity to cope with current demand for these exercises, let alone keep up with any growth in the volume of requests.

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He added that people “who haven’t even been born yet” will be dealing with DB pensions, adding: “We would urge the industry not to be entirely distracted by new DC ideas just yet, as the reality is that the remnants of DB will continue for decades to come.”